Global Market Updates
• Wall Street closed with a modest gains at Tuesday’s close (Feb 06, 2024). DJI surged by +0.37%, S&P 500 closed up by +0.23%, and Nasdaq edged up by +0.07%.
• Stocks rebounded slightly on Tuesday amid declining bond yields, influenced by investor reactions to Fed officials' comments on potential rate cuts and recent quarterly results. US stocks also received a boost from China's 3% rally in the SHCOMP, driven by signs of efforts to stabilize the equity market, including increased stock purchases by a state fund.
• US Treasury 10-yr yields slid by -8 bps to 4.09%, followed by 2-yr yields -7 bps to 4.39% on Tuesday. The path forward for interest rates remained uncertain, leading to a decrease in US Treasury yields on Tuesday.
• The ECB's 1-year inflation expectations eased to +3.2% (from +3.5% in Nov), the slowest rise in 1.75 years. 3-year expectations increased to +2.5% (from +2.4% in Nov).
• The Eurozone retail sales in December fell by 1.1% MoM exceeding the expected 1.0% decline and marking the largest drop in a year.
• German Dec factory orders posted an unexpected increase of +8.9% MoM, surpassing expectations of -0.2%. This marks the largest rise in 3.5 years.
• From Asia, Japan's December household spending fell by -2.5% YoY, missing the expected -2.0%.
• Global bond yields were mixed on Tuesday; the German bund 10-yr yield fell by -2.4 bps to 2.29%, while the UK gilt 10-yr yield slid by -5.70 bps to 3.95%. The Japanese GB 10-yr yield closed down by -0.20 at 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Tuesday (Feb 06, 2024), with the 10-yr benchmark yield rose 1.46 bps to 6.61%.
• The IDR depreciated against the USD (USD/IDR rose by +0.16% to 15,730) at Tuesday’s close. The Rupiah weakening persisted despite the +5.05% FY23 GDP, influenced by the Federal Reserve's interest rate projections.
• Investors welcomed Tuesday’s SVBI auction, securing USD442mn in awarded bids out of a total bid of USD472mn. The bidding rates showed a wider range compared to the previous auction, where USD472mn was awarded from a USD512mn bid total.
• On Tuesday’s Indo-GB series trading, FR100 and FR101 were notable in the bond market, experiencing high trade volumes of IDR5.88tn and IDR3.34tn, 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 6.55-6.70% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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