Global Market Updates
• Wall Street equities ended lower on March 4, with the DJI fell by -0.25, the S&P 500 closed down by -0.12%, while the Nasdaq slipped by -0.41%.
• The S&P 500 retreated from a record peak, leading stock indexes to settle lower. Markets awaits Fed Chair Powell’s semiannual monetary policy testimony to a House committee on Wednesday and a Senate panel on Thursday, hoping for clues on future policy. Friday's US payroll report will be closely watched to determine if the labor market remains strong and if wage pressures are being kept in check.
• US Treasury 10-yr yields rose by +3.0 bps to 4.22%, followed by 2-yr yields surged by +7.0 bps to 4.61% on Monday. Treasury yields rose as investors assessed mixed inflation data and awaited this week's economic updates.
• Atlanta Fed President Bostic's slightly hawkish comments on Monday suggested he expects the Fed's first interest rate cut in Q3 to be followed by a pause to assess its impact on the economy. He's concerned that businesses exuberance could lead to a surge in demand and add to price pressures.
• Meanwhile, the markets are currently pricing in a 3% chance of a -25 basis point rate cut at the March 19-20 FOMC meeting and a 21% chance for the following meeting on April 30-May 1.
• The Eurozone's March Sentix investor confidence index climbed by +2.4 to reach an 11-month high of -10.5, surpassing expectations of -10.6.
• Global bond yields were mixed on Monday; The German bund 10-yr yield fell by -2.2 bps to 2.39%, and the UK gilt 10-yr yield rose by +0.3 bps to 4.11%. The Japanese JGB 10-yr yield rose by +0.20 bps to 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Monday (Mar 4, 2024), with the 10-yr benchmark yield rose +0.02 bps to 6.61%, followed by 2-yr yield edged up +0.14 bps to 6.20%.
• The IDR depreciated against the USD at Monday’s close (USD/IDR rose by +0.25% to 15,740). The Rupiah closed weaker, with the DXY also weakened by 0,05% to 103.76.
• The Ministry of Finance reported that Indonesia's Manufacturing Purchasing Managers' Index (PMI) for February 2024 stood at 52.7, a slight decrease from January's 52.9. Despite this, Indonesia's manufacturing activity remains firmly in the expansion zone, indicating robust growth.
• In Monday's Indo-GB series trading, FR96 and FR91 were notable in the bond market, with substantial trade volumes of IDR3.07tn and IDR1.60tn, respectively. Meanwhile, FR81, FR77, and FR102 saw significant trading activity.
Market Forecast
• Given the recent developments that unfolded within the global and domestic markets, we expect the 10-yr Indo GB yield to move within the range of 6.50-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0099, FR0071, FR00101, FR0072, FR0075, FR0097.
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