Global Market Updates
• Wall Street equities exhibited a mixed closing pattern on Friday (Dec 22, 2023), DJI fell, -0.05%, S&P 500 surged +0.12%, and Nasdaq closed up by +0.09%.
• Stocks closed generally higher on a significant decline in the US PCE deflator report, signaling a dovish Fed policy, alongside a -12.2% MoM drop in US new home sales on Friday.
• US Treasury 10-yr yields rose by +1 bps to reach 3.90%, followed by shorter-termed UST 2-yr yields that slid by -2 bps hitting 4.31%. The 10-yr yield downward trend marking a decrease of nearly one-percentage-point since the conclusion of October.
• The US November PCE deflator dropped to a 2.75-year low of +2.6% YoY, below expectations, while the core PCE deflator fell to +3.2%, also lower than expectations.
• The US November personal income rose by +0.4% as expected, while personal spending increased by +0.2%, slightly below the anticipated +0.3%.
• The US November durable goods orders surged by +5.4%, reversing October's decline of -5.1%, while excluding transportation, they rose by +0.5%. Capital goods orders, excluding aircraft and defense, increased by +0.8%.
• Global bond yield on Friday moved lower; the German bund 10-yr yield rose +0.6 bps to 1.96%, the UK gilt 10-yr yield rose +0.2 bps to 3.50%. The Japanese GB 10-yr yield closed up +2.70 bps to 0.58%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Friday (Dec 22, 2023), with the 10-yr benchmark yield dropping -0.27 bps to 6.47%.
• IDR strengthened against the USD (USD/IDR fell by +0.42% to 15,483) on Friday. The IDR appreciated along with most Asian currencies as the DXY decline by 0.06% to 101.78, marking a 0.75% decrease over the week.
• DJPPR Kemenkeu effectively secured funding by issuing SBN Ritel throughout 2023, hitting IDR147.42tn, surpassing the intended IDR130tn target for the year. This accomplishment signifies a substantial rise from the 2022 total of IDR107.4tn.
• Broad money supply (M2) in Nov-23 experienced positive growth, reaching IDR8,573tn, marking a 3.3% YoY increase driven by progress in credit disbursement and net bills to the Central Government.
• Friday's SBN-backed assets SRBI auction saw increase interest, leading to higher bidding rates and awarded bids of IDR9.6tn, up from the previous IDR6.2tn following the Fed's softened stance.
• MNC Kapital Indonesia (BCAP) commenced book building today, starting from December 27, 2023, until January 5, 2024, for a continuous public offering named “Obligasi Berkelanjutan IV MNC Kapital Indonesia Tahap I Tahun 2023” with a principal amount of IDR260 billion offered in two series with tenors of 370 days and 3 years from the date of issuance.
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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