Global Market Updates
• Wall Street equities jumped on Wednesday (Dec 13, 2023), DJI notched up by +1.05%, S&P 500 climbed +1.16%, and Nasdaq rose by +1.20%.
• Stocks gained traction following the FOMC third consecutive meeting results, maintaining its federal funds rate target range unchanged at 5.25%-5.50%, foreseeing three rate cuts in 2024, bolder than before but below market’s expected four cuts.
• US Treasury 10-yr yields slid by -0.16 bps to reach 4.04%, followed by shorter-termed UST 2-yr yields that tumbled -0.27% to 4,46.
• The Fed meeting spurred a decline in Treasury yields, buoyed by the positive commentary on inflation-a welcomed reassurance for investors ahead of the holiday season.
• US Nov-23 PPI final demand eased to +0.9% YoY from +1.2% YoY in Oct-23, better than expectations of +1.0% YoY. Also Nov PPI ex-food and energy eased to +2.0% YoY from +2.3% YoY in Oct, better than expectations of +2.2%.
• EUR/USD dipped by -0.08% today due to concerns over Eurozone industrial production, which fell more than anticipated by -0.7% MoM against the expected -0.3%.
• Global bond yield on Wednesday mostly closed lower; the German bund 10-yr yield fell -5.3 bps to 2.17%, the UK gilt 10-yr yield tumbled -13.2 bps to 3.83%. The Japanese GB 10-yr yield slid -4.40 bps to 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Wednesday (Dec 13, 2023), as the 10-yr benchmark yield rose +7.24 bps to 6.74%.
• IDR continued its depreciation against USD (USD/IDR rose by +0.40% to 15,660) since Monday this week, while market anticipation leans towards a hawkish tone from the Fed tonight.
• Indonesian Migrant Workers (PMI) receive incentives under PMK 141/2023 from December 11, 2023, simplifying financial transactions when sending goods. This support is anticipated to attract more foreign inflows.
• In yesterday’s SRBI auction, the awarded bids amounted to IDR4.93tn, reflecting a decrease from the IDR6.20tn recorded in previous week’s auction.
• During Wednesday’s Indo GB series trading, FR96 and FR101 maintained their position as the bonds with the highest trading volume, recording substantial activity at IDR1.67tn and IDR1.40tn, respectively. FR89 and FR100 also saw significant trading.
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 6.50-6.70% for today.
• Attractive Indo GB series to be traded today : FR0040, FR0081, FR0096, FR0100.
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