Global Market Updates
• Wall Street equities saw a minor uptick on Monday (Dec 18, 2023), DJI close unchanged, S&P 500 closed up +0.45%, and Nasdaq edged up by +0.64%.
• Several mergers and acquisitions on Monday boosted stock performance. Additionally, positive sentiments about the Fed's ability to smoothly navigate the US economy favor stock market optimism.
• US Treasury 10-yr yields closed up by +4 bps to reach 3.95%, followed by shorter-termed UST 2-yr yields that fell by -1 bps hitting 4.43%.
• The 10-yr yield surged on Monday, marking the beginning of the last full trading week of 2023, traders continued to digest an unexpectedly dovish shift from the US Federal Reserve.
• The NAHB housing market index in the US rebound to 37 in Dec-23 from 34 in Nov-23, driven by reduced mortgage rates that heightened interest among potential buyers and raised sales expectations.
• Iran-supported Houthi militant attacks on Red Sea vessels have significantly disrupted global trade. This ongoing situation might lead to further disruptions and price hikes for shipments of goods and fuel.
• Global bond yield on Monday moved lower; the German bund 10-yr yield surged +6.2 bps to 2.08%, the UK gilt 10-yr yield climbed +0.8 bps to 3.69%. The Japanese GB 10-yr yield rose +0.68 bps to 0.68%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Monday (Dec 18, 2023), with the 10-yr benchmark yield dropping -3.74 bps to 6.50%.
• IDR depreciated against the USD (USD/IDR rose by +0.17% to 15,510) on Monday, reversing it’s two-day gains following the hawkish stance of the Fed’s William, contrary to the consensus.
• Indonesia Composite Bond Index (ICBI) shows positive performance growth, it's recorded an increase of 8.07% Ytd as of Monday (Dec 18, 2023), reaching 372.73. Conversely, IHSG recorded a modest increase of 3.93% Ytd.
• The government will also hold SBSN auction today with a total indicative target at IDR9tn. We expect the market being quite lively, given the oversubscription in the two previous auctions.
• In Monday’s Indo GB series trading, again FR96 and FR101 remained at the forefront in the bond market, recording significant trading volumes of IDR1.47tn and IDR1.15tn, respectively. Furthermore, FR77 and FR81 saw substantial activity.
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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