Global Market Updates
• Wall Street equities sustained a slight gain at Friday’s close (Jan 19, 2024). DJI rose by +1.05%, S&P 500 surged by +1.23%, and Nasdaq closed up by +1.70%.
• The stock market recorded moderate growth on Friday, with the S&P 500, DJI, and Nasdaq 100 hit all-time highs. A two-day rally in chip stocks, fueled by positive projections from TSMC’s, bolstered technology stocks and the overall market. The Asian markets also saw a boost, led by a surge in chip stocks.
• US Treasury 10-yr yields rose by +1 bps to 4.15%, with the 2-yr yields up by 5 bps to 4.39%. Treasury yields remained relatively stable as investors processed the most recent jobs data and Fed statements.
• The University of Michigan’s US Jan consumer sentiment index, increased by +9.1 to reach 78.8, surpassing the expected 70.1. Unexpectedly, 1-year inflation expectations declined by -0.2 points to 2.9% from 3.1%.
• US Dec existing home sales unexpectedly dropped by -1.0% MoM to 3.78mn, contrary to the expected +0.3% MoM increase to 3.83mn.
• German Dec PPI fell -1.2% MoM and -8.6% YoY which was below expectations of -0.4% MoM and -8.0% YoY.
• From Asia, Japan Dec national CPI dropped to +2.6% YoY from Nov’s +2.8%, while Dec CPI ex-fresh food and energy, also decreased to +3.7% YoY from Nov’s +3.8% YoY.
• Global bond yields on Friday were mixed; the German bund 10-yr yield fell by -0.8 bps to 2.34%, while the UK gilt 10-yr yield fell by -0.1 bps to 3.93%. The Japanese GB 10-yr yield surged by +1.70 at 0.65%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Friday (Jan 19, 2024), with the 10-yr benchmark yield rose +1.64 bps to 6.69%.
• The IDR appreciated against the USD (USD/IDR fell by +0.32% to 15,615) at Friday’s close. IDR strengthened in the last two days after a week of decline; we see market expectations for US interest rates fueling these fluctuations.
• In 2024, as of January 18, foreign capital flows revealed non-residents making net buy of IDR5.72tn in SBN, IDR9.83tn in the stock market, and IDR13.67tn in the money market (SRBI).
• Investors positively responded to Friday's SRBI auction, securing IDR25tn in awarded bids from a total bidding amount of IDR39.9tn, which showed a wider range of bidding rates compared to the previous auction, where IDR19.5tn was awarded from IDR33.8tn in bidding.
• On Friday’s Indo-GB series trading, FR100 and FR101 were notable in the bond market, experiencing high trade volumes of IDR1.43tn and IDR1.26tn, respectively. Moreover, FR77 and FR102 also maintained 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 6.55-6.75% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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