Global Market Updates
• Wall Street equities posted losses on April 17, with the DJI closed down by -0.12%, the S&P 500 fell by -0.58%, and the Nasdaq slipped by -1.15%.
• US stocks initially gained ground but later reversed course, influenced by a downturn in chip stocks on Wednesday. Big Tech, including Nvidia (NVDA) falling almost -4% and Meta (META) down over -1%, led the market decline. Heightened tensions in the Middle East and uncertainty over rate cuts have dampened market sentiment despite earlier-year gains.
• US Treasury 10-yr yields declined by -8.0 bps to 4.59%, and 2-yr yields fell by -4.0 bps to 4.93%. T-notes advanced on Wednesday as a decline in stocks bolstered demand for safe-haven assets. Robust demand at the Treasury’s USD13bn 20-year T-bond auction contributed to T-note prices reaching their peak levels.
• In the week ending April 12, US MBA mortgage applications rose by +3.3%. Purchase mortgage applications surged by +5.0%, while refinancing applications increased by +0.5%. The average 30-year fixed-rate mortgage reached a 4-month high of 7.13%, up from 7.01% in the previous week.
• From the UK, the inflation rate declined to 3.2% YoY in March 2024 from 3.4% in the previous month, slightly above the market expectation of 3.1%. This represents the lowest rate since September 2021.
• In Europe, ECB President Lagarde noted the ongoing recovery in output within the Eurozone. Nevertheless, she maintains her trajectory towards rate cuts in June amid receding inflation, positioning the euro zone as a potential leader in reducing borrowing costs among major jurisdictions during this cycle.
• Global bond yields were mixed on Wednesday; The German bond yield fell by -2.1 bps at 2.46%, the UK 10-yr gilt yield closed down by -3.8 bps to 4.26% and the Japanese 10-yr JGB yield ended up +1.20 bps at 0.88%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on April 17, with the 10-yr benchmark yield climbed by +7.09 bps to 6.94%, while the 2-yr yield surged by +18.29 bps to 6.70%.
• The IDR depreciated against the USD at Wednesday’s close (USD/IDR rose by +0.28% to 16,220). This persistent weakening of the Rupiah led to a four-year low, further exacerbated by current account deficits and capital outflows driven by risk aversion.
• Tuesday’s SVBI auction showed lower demand, with USD160mn awarded from a total bid of USD210mn, resulting in an average yield of 5.66%. This bidding volume decreased compared to the previous auction, where all bids totaling USD264mn were awarded.
• In Wednesday's Indo-GB series trading, FR0100 and FR0081 garnered considerable interest in outright transactions, with substantial trade volumes of IDR4.98tn and IDR3.37tn, respectively. Furthermore, FR0097, FR0102, and FR0100 experienced high trading frequency.
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 6.85-7.05% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0056, FR0059, FR0087, FR0082, FR0096, FR0098.
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