Global Market Updates
• Wall Street was closed on Monday, Feb 19, 2024 in observance of Presidents Day; as global stock closed mixed; FTSE rose by +0.22, GDAX fell by -0.15%, and SSE gained by +1.56%.
• Today the market will be looking forward on earnings reports form Walmart and Home Depot, while Nvidia’s report will be released on Wednesday.
• FOMC minutes also will be release on Tuesday, providing insights into the rationale behind the last rate decision, will be released on Tuesday. Typically, the release of minutes causes volatility in the markets as larger players seek to gain an edge on predicting the next rate decision.
• The markets are discounting the chances for a -25 bp rate cut at 8.5% for the March 19-20 FOMC meeting and 33.4% for the following meeting on April 30-May 1.
• The PBOC’s maintained the MLF rate at 2.5% in its latest operation, providing CNY500bn in one-year policy loans to alleviate yuan pressure. The PBOC, in its latest report, pledged to maintain flexible policies to stimulate domestic demand while ensuring price stability.
• Global bond yields moved higher on Monday; the German bund 10-yr yield rose by +6.0 bps to 2.41%, the UK gilt 10-yr yield increased by +1.0 bps to 4.12%, while, The Japanese GB 10-yr yield gained by +0.01 at 0.74%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Monday (Feb 19, 2024), with the 10-yr benchmark yield fell -0.21 bps to 6.61%.
• The IDR continued to weaken against the USD (USD/IDR rose by +0.06% to 15,630) at Monday’s close. The Rupiah weakened alongside the DXY, edging down to 104.17, while the markets remained cautious amid decreasing expectations of the Fed’s rate cut.
• The Rupiah decline contrasts with positive signs in the bond market. Yields are confined to a narrow range, with almost all INDOGB tenors recording a decline. Specifically, the short 2-yr tenor sees a notable drop of -3.5 bps as the market nears closure.
• Bank Indonesia's Residential Property Price Survey (SHPR) shows a 1.74% YoY increase in the Residential Property Price Index (IHPR) for Q4-23, down from 1.96% in Q3-23. This reflected in the sales grew by 3.27% YoY, rebounding from a 6.59% contraction in Q3.
• On Monday’s Indo-GB series trading, FR101 and FR81 were notable in the bond market, experiencing high trade volumes of IDR2.36tn and IDR2.02tn, respectively. Moreover, FR102, FR81 and FR77 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 : FR0087, FR0091, FR0096, FR0100 FR101.
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