Global Market Updates
• Wall Street equities experienced minor losses at Monday’s close (Feb 05, 2024). DJI fell by -0.71%, S&P 500 inched down by -0.32%, and Nasdaq closed down by -0.20%.
• Stocks were pressured on Monday as bond yields rose following hawkish remarks from the Fed. Fed Chair Powell and other officials signaled a reluctance to cut rates soon, emphasizing the need for progress in inflation reduction. Meanwhile, ON Semiconductor and Nvidia rose more than +9% and +4% respectively, mitigating losses on Nasdaq 100.
• US Treasury 10-yr yields surged by +14 bps to 4.17%, and 2-yr yields also rose by +10 bps to 4.46% on Monday. Treasury notes rose for a second day as investors considered the potential delay in rate cuts.
• The US Jan ISM services index rose to a four-month high of 53.4, beating expectations of 52.0. The prices paid sub-index also unexpectedly jumped to an 11-month high of 64.0, surpassing the anticipated decline to 56.7.
• The Eurozone Dec PPI slid by -10.6% YoY, weaker than expectations of -10.5% YoY, while Eurozone Feb-24 Sentix investor confidence rose to a 10-month high of -12.9, beating expectations of -15.0 by +2.9.
• From Asia, the China Jan Caixin services PMI unexpectedly dropped by -0.2 to 52.7, falling below expectations for an increase to 53.0.
• Global bond yields were mixed on Monday; the German bund 10-yr yield rose by +7.5 bps to 2.31%, while the UK gilt 10-yr yield rising by +8.90 bps to 4.01%. The Japanese GB 10-yr yield closed higher by +5.30 at 0.73%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Monday (Feb 05, 2024), with the 10-yr benchmark yield rose 7.26 bps to 6.59%.
• The IDR depreciated against the USD (USD/IDR rose by +0.30% to 15,705) at Monday’s close. The rupiah weakened as the DXY strengthened to 103.99 due to strong US economic data, reducing the chances of interest rate cuts.
• The Central Statistics Agency (BPS) announced Indonesia's GDP growth in 4Q23 at 5.04% YoY, up from 4.94% in 3Q23. The growth in 4Q23 was supported by government spending, which increased by +2.81% YoY, compared to -3.9% YoY in 3Q23.
• The SBSN auction gained positive response yesterday, garnered a total incoming bid of IDR23.6tn, slightly lower than the previous IDR23.7tn. PBS032 secured the highest awarded amount of IDR5.8tn out of the total awarded sum of IDR9.2tn.
• On Monday’s Indo-GB series trading, FR101 and FR100 were notable in the bond market, experiencing high trade volumes of IDR3.34tn and IDR2.28tn, respectively. Moreover, 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 6.55-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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