Global Market Updates
• Wall Street equities settled mixed on Tuesday’s close (Jan 23, 2024). DJI slid by -0.25%, S&P 500 rose by +0.29%, and Nasdaq closed up by +0.43%.
• Stocks closed with a mixed performance, influenced by corporate earning results. Airline stocks fueled a rally in the broader market after United Airlines reported robust Q4 adjusted EPS. Conversely, DJI declined as 3M Co. fell over -11% due to a 2024 adjusted EPS forecast below consensus.
• US Treasury 10-yr yields rose by +3 bps, reaching 4.14%, while the shorter-termed UST 2-yr yields slid by -6 bps at 4.31%. 10-yr yields edged slightly higher as market participants awaited the release of key economic data later in the week.
• US Jan-24 Richmond Fed Manufacturing Survey's current conditions unexpectedly fell to a 3.5-year low of -15, missing the expected increase to -8.
• Eurozone Jan CCI unexpectedly dropped by -1.0 to -16.1, falling short of expectations for an increase to -14.3.
• From Asia, as expected, the BOJ voted 9-0 to maintain a -0.1% policy rate and the 10-year JGB yield target at about 0%.
• The BOJ raised its 2024 GDP forecast to +1.2% from the prior estimate of +1.0% and reduced its 2024 core CPI estimate to 2.4% from 3.8%. BOJ Governor Ueda stated that the outlook is becoming more certain, and policy will remain accommodative even if negative rates end.
• Global bond yields on Tuesday moved higher; the German bund 10-yr yield grew by +6.2 bps to 2.35%, while the UK gilt 10-yr yield climbed by +8.2 bps to 3.98%. The Japanese GB 10-yr yield increased by +1.30 at 0.67%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Tuesday (Jan 23, 2024), with the 10-yr benchmark yield fell -0.71 bps to 6.58%.
• The IDR appreciated against the USD (USD/IDR fell by +0.03% to 15,630) at Tuesday’s close.
• Investors welcomed Tuesday’s SVBI auction, securing USD251mn in awarded bids out of a total bid of USD397mn. The bidding rates showed a wider range compared to the previous auction, where USD284mn was awarded from a USD382mn bid total,
• The SBSN auction on Tuesday garnered a total bid of IDR23.7tn, down from the previous IDR28.3tn. PBS032 secured the highest awarded amount of IDR5.1tn out of the total awarded sum of IDR12.0tn.
• On Tuesday’s Indo-GB series trading, PBS32 and FR101 were notable in the bond market, experiencing high trade volumes of IDR2.19tn and IDR1.78tn, respectively. Moreover, FR102 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 6.55-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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