• Wall Street equities rebounded on April 22, with the DJI surged by +0.67%, the S&P 500 rose by +0.87%, and the Nasdaq closed up by +1.11%.
• US stocks indexes closed moderately higher on Monday, with the DJI hitting a 1-week high. Reduced geopolitical tensions, suggesting the Iran-Israel attacks may have subsided, boosted stocks. A +4% surge in Nvidia lifted tech stocks after last Friday's -10% drop. Furthermore, the strength of bank stocks on Monday bolstered the overall market.
• US Treasury 10-yr yields closed flat, up by less than +1.0 bps to 4.62%, while 2-yr yields also edged up by less than +1.0 bps to 4.98%. Stock strength on Monday reduced T-note safe-haven demand. T-notes rose on short-covering after 10-year German bunds gained on ECB's Centeno hinting at 100+ bps rate cut potential.
• The Chicago Fed National Activity Index increased to +0.15 in March 2024 from an upwardly revised +0.09 in February, slightly surpassing market expectations of +0.09.
• In Europe, the government deficit to GDP ratio in the Euro Area decreased to 3.6% in 2023 from a revised 3.7% in 2022. Eleven Member States had deficits exceeding 3% of GDP, while only three countries recorded surpluses.
• Global bond yields were mixed on Monday; The German bond yield slid by -1.4 bps at 2.48%, the UK 10-yr gilt yield fell by -2.20 bps to 4.20% and the Japanese 10-yr JGB yield closed up by +3.90 bps at 0.89%.
Domestic Market Updates• Indonesian benchmark series of LCY government bonds closed higher on April 22, with the 10-yr benchmark yield surged by +4.35 bps to 7.02%, while the 2-yr yield rose by +3.84 bps to 6.86%.
• The IDR appreciated against the USD at Monday’s close (USD/IDR fell by -0.12% to 16,235). The Rupiah received support following the March trade balance reported a 47-month consecutive surplus.
• In March 2024, Indonesia's trade balance showed a surplus of USD4.47bn. Exports grew by +16.40% MoM to USD22.43bn, driven by non-oil and gas sectors like precious metals and jewelry (+206.58% MoM). Imports declined by -5.34% MoM to USD14.63bn, mainly from machinery/mechanical equipment and parts (-17.18% MoM).
• The SRBI auction on Friday saw a notable drop in bids compared to the previous auction, with the winning bid at IDR3.48tn (vs IDR13.2tn) out of total bids of IDR7.19tn (vs IDR14.91tn). Despite higher yields, incoming bids remained weak, indicating a risk-off sentiment and tightening liquidity.
• In Monday's Indo-GB series trading, FR0087 and FR0101 garnered considerable interest in outright transactions, with the highest trade volumes of IDR1.19tn and IDR1.04tn, respectively. Furthermore, FR0097, FR0086, and PBS026 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, FR0059, FR0095, FR0101, FR0087, FR0096.
