Global Market Updates
• Wall Street equities continued to move higher on Friday’s close (Feb 02, 2024). DJI up by +0.35%, S&P 500 gaining by +1.07%, and Nasdaq notching up by +1.74%.
• Stocks closed the week with a warm embrace, opening higher, propelled by impressive earnings particularly from giant tech companies. Meta surged more than 20%, while Amazon gained nearly 8%. Despite rising bond yields, stocks found support on Friday, buoyed by a US January unemployment report that surpassed expectations. Payrolls recorded the most significant increase in a year, with wages climbed higher than anticipated.
• US Treasury 10-yr yields surged by +16 bps to 4.03%, and 2-yr yields also rose by +16 bps to 4.36% on Friday. The 10-yr yield breached the 4% threshold, bolstered by a robust jobs report.
• This led to a remarkable surge in US nonfarm payrolls by +353,000 in Jan-24, exceeding expectations of +185,000. Additionally, the unemployment rate remained steady at 3.7%, defying expectations of an increase to 3.8%.
• US Jan-24 average hourly earnings beat expectations, rising +0.6% MoM and +4.5% YoY. December factory orders met expectations, increasing by +0.2% MoM.
• The University of Michigan's US Consumer Sentiment Index for January was revised up to a 2.5-year high of 79.0, surpassing expectations of 78.9.
• Global bond yields were mixed on Friday; the German bund 10-yr yield rose by +9.2 bps to 2.24%, while the UK gilt 10-yr yield jumped by +17.2 bps to 3.92%. The Japanese GB 10-yr yield closed down by -3.30 at 0.67%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Friday (Feb 02, 2024), with the 10-yr benchmark yield fell -1.18 bps to 6.52%.
• The IDR appreciated against the USD (USD/IDR fell by -0.68% to 15,658) at Friday’s close. The Rupiah closed higher over the weekend, coinciding with the first KSSK meeting yesterday and a positive inflation report.
• The government reinstated the automatic adjustment policy for the temporary withholding of expenditures in the 2024 fiscal year, allocating around 5% of the budget ceiling of IDR50.14Tn for Ministries/Agencies (K/L). This measure prioritizes essential spending at the beginning of the year.
• Based on BI transaction on Jan 29-Feb 1, 2024, non-resident recorded a net purchase of IDR8.51Tn. This comprised a net purchase of IDR5.51Tn in the SBN market, IDR2.46Tn in the stock market, and IDR0.54Tn in SRBI.
• On Friday’s Indo-GB series trading, FR101 and FR98 once again were notable in the bond market, experiencing high trade volumes of IDR7.80tn and IDR6.99tn, respectively. Moreover, FR91 and FR102 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 6.55-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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