Global Market Updates
• Wall Street equities closed with a mixed bag on April 3, with the DJI fell by -0.11%, the S&P 500 rose by +0.11%, and the Nasdaq closed up by +0.23%.
• Wednesday saw mixed results in stock indexes, with the DJI hitting a two-week low. However, stocks rebounded as bond yields retreated from earlier highs due to an unexpected decline in the US March ISM services index. Additionally, price pressures eased with the March ISM services price paid sub-index dropping more than anticipated to a four-year low.
• US Treasury 10-yr yields fell by -1.4 bps to 4.35%, while 2-yr yields declined by -2.9 bps to 4.67%. T-notes initially dipped but later rebounded as the US March ISM services index unexpectedly fell, signaling a dovish Fed stance. Fed Chair Powell's dovish remarks at Stanford University on Wednesday further supported the recovery.
• In March, the US ISM services index unexpectedly fell to 51.4 from expectations of a rise to 52.8. The ISM services price paid sub-index also dropped to a four-year low of 53.4, below the anticipated 58.4.
• The US March ADP employment rose by 184,000, exceeding expectations of 150,000. Furthermore, the February ADP figure was revised upward to 155,000 from the previously reported 140,000.
• Eurozone's March CPI eased to 2.4% YoY from 2.6% YoY in Feb, beating expectations of 2.5% YoY. March core CPI also eased to 2.9% YoY from 3.1% YoY in Feb, surpassing expectations of 3.0% YoY and marking the slowest increase in 2 years.
• Global bond yields were mixed on Wednesday; The German bond yield fell by -0.4 bps to 2.39%, the UK 10-yr gilt yield slid by -2.9 bps to 4.06% and the Japanese 10-yr JGB yield rose by 4.7 bps to 0.80%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed mixed on April 3, with the 10-yr benchmark yield rose by +0.55 bps to 6.67%, while the 2-yr yield inched down by -0.10 bps to 6.33%.
• The IDR weakened against the USD on Wednesday’s close (USD/IDR rose by +0.14% to 15,920). The rupiah remains pressured against the dollar as markets expect no imminent Fed rate cuts, while the DXY fell to 104.77.
• Meanwhile, Tuesday’s SVBI auction showed lower demand, with all bids awarded totaling USD264mn. The bidding volume decreased compared to the previous auction, where USD358mn was awarded from a total bid of USD375mn.
• The government is set to distribute ongoing social assistance in April 2024, including PKH, non-cash food aid, and BLT for food risk mitigation, aimed at assisting communities in meeting their needs, including preparations for Lebaran.
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 6.55-6.70% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0064, FR0101, FR0087, FR0096, FR0098.
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