Global Market Updates
• Wall Street equities concluded with a modest uptick at Monday’s close (Jan 22, 2024). DJI surge by +0.36%, S&P 500 inched up by +0.22%, and Nasdaq closed up by +0.32%.
• Stocks continued their modest gain, reaching another new record high for the S&P 500, DJI, and Nasdaq 100. This upward trend fueled by positive sentiments about the US economic outlook and expectations of robust corporate quarterly earnings.
• US Treasury 10-yr yields fell by -4 bps, reaching 4.11%, while the shorter-termed UST 2-yr yields edged down by -2 bps at 4.37%. UST yields retreated as another significant week of economic data commenced.
• US Dec leading economic indicators decreased by -0.1% MoM, a smaller decline than the anticipated -0.3% MoM.
• This week, key economic data includes a preliminary Q4 GDP growth figure on Thursday and the Commerce Department's closely-watched PCE Price Index for December on Friday.
• From Asia, PBoC held January lending rates steady, supporting economic recovery. The 1-yr LPR stayed at a record low of 3.45% for the fifth month, and the 5-yr rate, a mortgage benchmark, remained at 4.2% for the seventh month.
• Global bond yields on Monday moved lower; the German bund 10-yr yield dropped by -5.1 bps to 2.29%, while the UK gilt 10-yr yield decreased by -2.5 bps to 3.90%. The Japanese GB 10-yr yield rose by -1.00 at 0.66%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Monday (Jan 22, 2024), with the 10-yr benchmark yield fell -2.38 bps to 6.59%.
• The IDR depreciated against the USD (USD/IDR rose by +0.13% to 15,635) at Monday’s close. IDR weakened after a two-day rise, amid foreign capital inflows into domestic market.
• Indonesia's money supply (M2) grew +3.5% YoY to IDR8,824.7tn in Dec-23, surpassing Nov-23's 3.3% YoY. This growth was backed by a 10.3% YoY increase in credit disbursement to IDR7,044.8tn in Dec-23, up from the previous month's 9.7% YoY. The Liquid Assets to Third-Party Funds Ratio (AL/DPK) is 28.37%.
• The government will conduct a Sovereign Sharia Securities or Sukuk Negara Auction today (Jan 23), with an indicative target of IDR12tn. We estimates the total incoming bids for this auction to range between IDR30tn and IDR35tn, with bid-to-cover ratio between 2.5x and 2.91x.
• On Monday’s Indo-GB series trading, FR96 and SPN12240229 were notable in the bond market, experiencing high trade volumes of IDR1.69tn and IDR1.21tn, respectively. Moreover, FR81 and FR77 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 6.55-6.70% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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