Global Market Updates
• Wall Street equities closed with a moderate decline on Wednesday (Dec 20, 2023), DJI close down, -1.27%, S&P 500 closed down -1.47%, and Nasdaq closed down by -1.53%.
• The rapid surge in stock indexes over the last fortnight has propelled them into overbought territory, prompting profit-taking and technical selling by fund managers and investors on Wednesday.
• US Treasury 10-yr yields closed down by -7 bps to reach 3.86%, followed by shorter-termed UST 2-yr yields that also closed down by -7 bps hitting 4.34%.
• The 10-yr yield continued its declined on Wednesday, followed by the broader decline in global government bond yields due to indications of easing inflation.
• The US Dec CCI surged to a five-month high of 110.7, beating expectations of 104.5 by +9.7. The Eurozone's December CCI climbed to a five-month high of -15.1, surpassing expectations of -16.3 by +1.8.
• UK's November CPI slowed to +3.9% YoY from October's +4.6% YoY, below expectations of +4.3% YoY, marking the slowest growth in over two years.
• German Nov PPI fell -0.5% MoM and -7.9% YoY, weaker than expectations of -0.3% MoM and -7.5% YoY.
• Global bond yield on Wednesday moved lower; the German bund 10-yr yield dropped -4.5 bps to -1.97%, the UK gilt 10-yr yield fell -12.4 bps to 3.52%. The Japanese GB 10-yr yield closed down -7.60 bps to 0.56%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Wednesday (Dec 20, 2023), with the 10-yr benchmark yield dropping -0.48 bps to 6.48%.
• IDR weakened against the USD (USD/IDR rose by +0.50% to 15,510) on Wednesday, IDR opened stronger at 15,495 but slipped back and closed at a lower level.
• Bloomberg’s scoring places Indonesian rupiah bonds at the bottom among 15 emerging markets, alongside Malaysia and South Korea. This might potentially impact less foreign inflows in the market for the upcoming year.
• Yesterday’s SRBI auction saw sluggish activity, with the awarded bids amounting to IDR7.09tn, form a total of IDR12.63tn in bids. This reflects market expectations of a higher bidding rate, marking a decrease from the IDR10.34tn recorded in previous week’s auction.
• On Wednesday’s Indo GB series trading, FR70 and PBS36 retained their leading positions in the bond market, with substantial trading volumes reaching IDR1.56tn and IDR1.50tn, respectively. Furthermore, FR77 and FR91 showed considerable 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 6.45-6.60% for today.
• Attractive Indo GB series to be traded today : FR0040, FR0081, FR0096, FR0100.
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