Global Market Updates
• Wall Street equities incurred minor losses on Tuesday’s close (Feb 20, 2024). DJI slid by -0.17%, followed by S&P 500 which fell by -0.60%, and Nasdaq closed down by -0.92%.
• Stock saw a modest downturn, with the S&P 500 closing below 5,000 on Tuesday. The broader market is under pressure on Tuesday due to weakness in chip stocks, impacting the technology sector. Nvidia’s decline of more than -5% is leading technology stocks lower ahead of its Q4 earnings results on Wednesday.
• US Treasury 10-yr yields fell by -3.0 bps to 4.27% followed by 2-yr yields -5.0 bps at 4.59% on Tuesday. The yields turned mostly declined, due to ongoing uncertainty about the economic outlook and interest rates.
• In December, the Eurozone construction report showed a +0.8% MoM increase, marking the largest uptick in 10 months. Meanwhile, new car registrations in January grew by +12.1% YoY reaching 852k units.
• USD/JPY down -0.21% on declining T-note yields. Yen strengthens amid speculation of Japanese government intervention following Finance Minister Suzuki's commitment. Swaps indicate a 32% chance of a +10 bp BOJ rate hike on March 19 and 62% on April 26.
• Global bond yields moved lower on Tuesday; the German bund 10-yr yield fell by -4.1 bps to 2.37%, the UK gilt 10-yr yield decreased by -6.7 bps to 4.04%, while, The Japanese GB 10-yr yield edged down by -0.10 at 0.73%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Tuesday (Feb 20, 2024), with the 10-yr benchmark yield rose +0.12 bps to 6.61%.
• The IDR depreciated against the USD (USD/IDR rose by +0.19% to 15,660) at Tuesday’s close. The Rupiah closed lower, while the market anticipates that BI is likely to maintain the interest rate at 6.00%.
• The SBSN auction gained positive response yesterday, garnered a total incoming bid of IDR19.8tn, lower than the previous IDR23.6tn. PBS038 secured the highest awarded amount of IDR3.95tn out of the total awarded sum of IDR12tn.
• The SVBI auction on Tuesday garnered a total awarded bid of USD652mn from a USD662mn bid. However, the bidding rates showed a narrower range compared to the previous auction, where USD607mn was awarded from an USD808mn bid.
• On Tuesday’s Indo-GB series trading, FR101 and FR87 were notable in the bond market, experiencing high trade volumes of IDR3.18tn and IDR3.02tn, respectively. Moreover, FR102, FR91 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 : FR0087, FR0091, FR0096, FR0097, FR0100 FR101.
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