Global Market Updates
• Wall Street equities closed with mixed result on Feb 23, with the DJI surged by +0.16%, followed by S&P 500 which edged up by +0.03%, while Nasdaq closed down by -0.28%.
• Stocks showed varied movements on Friday, with the S&P 500, the Dow Jones, and the Nasdaq 100 posted new all-time highs. A sharp rise in chip stocks on Thursday led to profit-taking in tech stocks, dragging the Nasdaq down by -0.30% after reaching record levels the previous day. Stocks were bolstered on Friday by a drop in global bond yields, influenced by dovish central bank remarks.
• US Treasury 10-yr yields fell by -7.0 bps to 4.26% followed by 2-yr yields down by +2.0 bps at 4.67% on Friday. The 10-yr yields dips as markets reacted to policymakers continuing to be cautious about rate cuts decisions.
• As of Feb 25, the markets are currently pricing in a 25 bps Fed rate cut to 4% for the March 19-20 FOMC meeting. While, the chances for a rate cut at the April 30-May 1 have decreased to 25% from 75% a month ago.
• From Europe, the ECB's February 1-year inflation expectations rose to 3.3% from 3.2% in January. The February 3-year inflation expectations remained unchanged from January at 2.5%, which was higher than expectations of a decline to 2.4%.
• Global bond yields moved lower on Friday; The German bund 10-yr yield fell by -7.7 bps to 2.36%, and the UK gilt 10-yr yield slipped by -6.9 bps to 4.03%. The Japanese JGB 10-yr yield remained unchanged at 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Friday (Feb 23, 2024), with the 10-yr benchmark yield fell -0.94 bps to 6.56%.
• The IDR weakened against the USD (USD/IDR rose by +0.03% to 15,595). The rupiah exchange rate closed lower on Friday following Thursday's increase, along with most Asian currencies. The DXY also fell by 0.07% to 103.89.
• The Ministry of Finance reported that state revenue in Jan-2024 was IDR215.5tn, while state expenditure was IDR184.2tn. As a result, the 2024 state budget (APBN) until the end of January recorded a surplus of IDR31.3tn (0.14% of GDP). Meanwhile, ex-debt interest payments, the primary balance achieved a surplus of IDR61.4tn.
• As of February 22, 2024, BI reported foreign fund flows showing a net sell of IDR 5.87tn in the SBN market, a net buy of IDR23.26tn in the stock market, and a net buy of IDR25.30tn in the SRBI.
• In Friday's Indo-GB series trading, FR100 and FR81 were prominent in the bond market, with substantial trade volumes of IDR2.17 trillion and IDR1.37 trillion, respectively. Meanwhile, FR81, FR102, and FR77 saw notable trading 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 6.50-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0056, FR00101, FR0091, FR097.
Disclaimer On
