Global Market Updates
• Wall Street equities experienced minor losses at Wednesday’s close (Jan 31, 2024). DJI fell by -0.82%, S&P 500 slid by -1.61%, and Nasdaq closed down by -2.23%.
• Stocks closed lower as the broader market is faced pressure as technology stocks declined, influenced by disappointing earnings from Alphabet, AMD, and Microsoft that fell short of high expectations. On a positive note, Boeing and Paramount Global surges by+4% and +8%, respectively.
• US Treasury 10-yr yields fell by -7 bps to 3.99%, and 2-yr yields down by -9 bps to 4.27% on Wednesday. Bond yields fell as Jan ADP report showed lower-than-expected job additions and Q4 employment cost index rose less than anticipated.
• The US Jan-24 ADP employment change increased by +107,000, below the expected +150,000. The Q4 Employment Cost Index rose by +0.9% QOQ, below the expected +1.0% and marking the smallest increase in 2-1/2 years.
• The US Jan MNI Chicago PMI unexpectedly declined by -1.2 to 46.0, falling short of the expected increase to 48.0.
• The Treasury's announcement for the February quarterly refunding includes the sale of USD121bn in T-notes and T-bonds, meeting expectations. The Treasury has signaled no plans to increase auction sizes for at least the next several quarters.
• Global bond yields were mixed on Wednesday; the German bund 10-yr yield fell by -11.2 bps to 2.15%, while the UK gilt 10-yr yield down by -10.7 bps to 3.79%. The Japanese GB 10-yr yield closed up by 1.50 at 0.73%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Wednesday (Jan 31, 2024), with the 10-yr benchmark yield fell -2.10 bps to 6.58%.
• The IDR weakened against the USD (USD/IDR rose by +0.02% to 15,782) at Wednesday’s close. The IDR edged down as the market anticipated the potential decision by the Fed to maintain the benchmark interest rates.
• Finance Minister Sri Mulyani Indrawati stated in a Tuesday KKSK conference that Indonesia's financial system stability in Q4 2023 remains intact. Economic growth is projected to stay around 5%, with a decreased unemployment rate of 5.32% and a poverty rate of 9.36%.
• Meanwhile, The IMF has released the World Economic Outlook update for January 2024. The report forecasts a 5% economic growth for Indonesia in 2024, which projected higher than China’s at 4.6%.
• On Wednesday’s Indo-GB series trading, FR100 and FR101 once again were notable in the bond market, experiencing high trade volumes of IDR2.11tn and IDR2.03tn, respectively. Moreover, FR102 and FR81 exhibited significant trading frequency.
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 6.55-6.70% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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