Global Market Updates
Wall Street equities closed mixed on April 19, with the DJI rose by +0.56%, the S&P 500 fell by -0.88%, and the Nasdaq closed down by -2.05%.
US stocks ended mostly lower on Friday, as the S&P 500 hit a 1-3/4 month low and the Nasdaq 100 reached a 3-month low. The sell-off in mega-cap tech stocks led to long position liquidation ahead of earnings reports. Negative corporate news and geopolitical risks also contributed to the decline.
US Treasury 10-yr yields lowered by -2.0 bps to 4.62%, while 2-yr yields slid by -1.0 bps to 4.97%. Hawkish comments from Fed’s Goolsbee on Friday, mentioning stalled inflation progress, and a jump in the 10-year German bund yield to a 4-1/2 month high, weighed on T-note prices.
The markets are currently pricing in a 25 bps rate cut with a 3.8% probability for the upcoming FOMC meeting on April 30-May 1, and a 16.5% probability for the subsequent meeting on June 11-12.
In Europe, the German March Producer Price Index (PPI) increased by +0.2% MoM and declined by -2.9% YoY, surpassing expectations of +0.1% MoM and -3.3% YoY.
Meanwhile, ECB President Lagarde noted ongoing disinflation and subdued growth in the Eurozone. ECB’s Simkus suggested a less restrictive monetary policy, hinting at three potential rate cuts by the ECB this year.
Global bond yields were mixed on Friday; The German bond yield rose by +0.3 bps at 2.50%, the UK 10-yr gilt yield fell by -4.20 bps to 4.23% and the Japanese 10-yr JGB yield closed down by -1.80 bps at 0.85%.
Domestic Market Updates
Indonesian benchmark series of LCY government bonds closed higher on April 19, with the 10-yr benchmark yield inched down by -0.94 bps to 6.93%, while the 2-yr yield fell by -1.10 bps to 6.69%.
The IDR depreciated against the USD at Friday’s close (USD/IDR rose by +0.49% to 16,255). The Rupiah's decline persisted with a YTD depreciation of over 5%. Should this trend continue, we anticipate a potential increase in the BI rate to manage foreign outflows and further stabilize the IDR against further depreciation.
From April 16 to April 18, 2024, non-residents in the domestic financial market recorded a net sell of IDR21.46tn. This comprised IDR9.79tn in government bonds (SBN), IDR3.67tn in stocks, and IDR8.00tn in Bank Indonesia's Rupiah Securities (SRBI).
In Friday's Indo-GB series trading, FR0100 and FR0101 garnered considerable interest in outright transactions, with the highest trade volumes of IDR3.65tn and IDR2.471tn, respectively. Furthermore, FR0097, FR0100, and FR0102 experienced high trading frequency.
Market Forecast
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