Global Market Updates
• Wall Street equities settled mixed on Wednesday’s close (Jan 24, 2024). DJI fell by -0.26%, S&P 500 inched up by +0.08%, and Nasdaq closed up by +0.36%.
• Stocks on Wednesday delivered a varied performance, driven by optimism in the US economic outlook and robust corporate earnings, lifted stock prices. Strong tech earnings supported the broader market, with Netflix surging over +10% and Q4 streaming memberships beating consensus.
• US Treasury 10-yr yields surged by +4 bps, reaching 4.18%, while the shorter-termed UST 2-yr yields rose by +3 bps at 4.34%. Bond yields rose on Wednesday as a US manufacturing activity gauge expanded.
• The US Jan-24 S&P Manufacturing PMI unexpectedly surged by +2.4 to 50.3, beating expectations of a decline to 47.6 and marking the swiftest expansion in 15 months.
• The weekly US MBA Mortgage Applications Index rose by +3.7% to. The home purchase sub-index reached a 9-month high with a +7.5% increase, while the refinancing sub-index fell by -7.0%. The average 30-year fixed-rate mortgage rose 3 basis points to 6.78%.
• The Eurozone Jan-24 S&P Manufacturing PMI unexpectedly increased by +2.2 to a 10-month high of 46.6, surpassing expectations of 44.7.
• From Asia, The PBOC cut the reserve requirement ratio for banks by 50 basis points to 10.00% from 10.50%, effective from February 5.
• Global bond yields were mixed on Wednesday; the German bund 10-yr yield fell by -1.0 bps to 2.34%, while the UK gilt 10-yr yield increased by +2.40 bps to 4.01%. The Japanese GB 10-yr yield rose by +4.60 at 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Wednesday (Jan 24, 2024), with the 10-yr benchmark yield rose +2.01 bps to 6.61%.
• The IDR depreciated against the USD (USD/IDR rose by +0.51% to 15,710) at Wednesday’s close.
• The Rupiah weakened, reflected by the DXY which remained above 103. We expect external data and geopolitical uncertainties will continue to impacting the rupiah, supporting the strength of the USD as a safe-haven.
• BKPM released investment realization during 2023 reaching IDR1,418.9tn. The achievement exceeded the target of 101.3%, set at IDR1,400tn, with employment for 1,823,543 people. This includes IDR744tn for FDI, growing by 13.7% YoY, and IDR674.9tn for domestic investment growing by 22.1%.
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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