Global Market Updates
• Wall Street equities close Friday’s session with marginal gains (Dec 15, 2023), DJI rose by +0.15%, S&P 500 slipped -0.01%, and Nasdaq closed up by +0.52%.
• The Fed’s comments on Friday tempered rate cut expectations, limiting the upward momentum of stocks. Lackluster US economic reports also hampered hopes for a gentle economic transition guided by the Fed.
• US Treasury 10-yr yields dropped by -1 bps to reach 3.91%, followed by shorter-termed UST 2-yr yields that rose by +7 bps hitting 4.44%.
• The 10-yr yield declined on Friday, adding to its significant drop this week, It had fallen below the 4% level for the first time since August on Thursday, hitting its lowest point since July.
• The US Dec-23 Empire manufacturing survey index fell by -23.6 to a 4-month low of -14.5. Additionally US Nov manufacturing production increase by +0.3% MoM, below the expected +0.5% MoM. US Dec S&P manufacturing PMI unexpectedly fell to 48.2, missing the expected rise to 49.5.
• Gold held steady above USD2,000 this week, slipping 0.8% to USD 2,018 per ounce on Friday. However, it gained 0.8% for the week, as the Fed hinted at lower rates, boosting the allure of non-yielding bullion.
• Global bond yield on Friday moved lower; the German bund 10-yr yield tumbled -10.3 bps to 2.01%, the UK gilt 10-yr yield fell -10.1 bps to 3.68%. The Japanese GB 10-yr yield tumbled -2.00 bps to 0.67%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Friday (Dec 15, 2023), as the 10-yr benchmark yield tumbled -10.61 bps to 6.63%.
• IDR closed stronger against the USD (USD/IDR fell by -0.03% to 15,493) on Friday, after Indonesia's trade balance recorded a surplus for 43 consecutive months and a more dovish stance from the Fed.
• The Central Statistics Agency (BPS) reported a trade surplus of USD2.41 bn, below consensus expectations. Exports totaled USD22 bn, marking an 8.56% decrease from Nov-22 YoY. Moreover there was a slight 0.67% MoM decrease in export value. While imports reached USD19.59 bn, showing a 3.29% YoY growth, increased by 4.89% MoM.
• SBN-backed assets SRBI back on track, garnering IDR10.3tn in awarded bids during its Friday auction, which featured a wider range of biding rates compared to the IDR6.2tn in the previous week.
• In Friday’s Indo GB series trading, FR96 and FR101 emerged as leaders in the bond market, tallying trading volumes of IDR2.16tn and IDR1.75tn, respectively. Furthermore, the most actively traded were PBS36 and FR77.
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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