Global Market Updates
• Wall Street equities settled mixed on Friday’s close (Jan 26, 2024). DJI rose by +0.16%, S&P 500 slid by -0.07%, and Nasdaq closed down by -0.36%.
• Stocks closed with a mixed performance, supported by optimism about Fed's soft landing. US Dec economic reports beat expectations, and price pressures eased with the slowest rise in the PCE core deflator in 2-3/4 years. Decline in chip stocks, notably Intel's -11% drop, dragged down the market on the back of a gloomy Q1 earnings outlook.
• US Treasury 10-yr yields up by +1 bps to 4.15%, and 2-yr yields advanced by +6 bps to 4.34% on Friday. 10-yr yields remained stable as investors considered positive inflation data, pointing to potential rate cuts later this year.
• US Dec personal spending increased by 0.7% MoM, surpassing the expected 0.5% MoM, with a revised higher for Nov at +0.4% MoM, up from +0.2% MoM.
• The US Dec PCE core deflator, the Fed's preferred inflation measure, decreased to +2.9% YoY from November's +3.2% YoY. This outperformed expectations of +3.0% YoY.
• Eurozone's Dec M3 money supply unexpectedly rose +0.1% YoY, beating expectations of -0.7% YoY and marking the first increase in six months.
• German Feb GfK consumer confidence unexpectedly dropped to an 11-month low of -29.7, down -4.3, missing the expected increase to -24.6.
• From Asia, Tokyo Jan CPI softened to +1.6% YoY from Dec's +2.4%, below expectations and the slowest increase in 22 months.
• Global bond yields were mixed on Friday; the German bund 10-yr yield fell by -5.2 bps to 2.29%, while the UK gilt 10-yr yield decreased by -1.90 bps to 3.96%. The Japanese GB 10-yr yield slid by -2.90 at 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Friday (Jan 26, 2024), with the 10-yr benchmark yield fell -0.15 bps to 6.63%.
• The IDR appreciated against the USD (USD/IDR fell by -0.03% to 15,820) at Friday’s close. Rupiah saw a minor upswing over the weekend ahead of the Fed meeting scheduled Jan 30-31, 2024.
• As of Jan 25, 2024, foreign capital flow indicates non-resident made a net purchase of IDR7.11tn in the SBN, a net purchase of IDR7.35tn in the stock market, and a net purchase of IDR18.92tn in the SRBI market.
• On Friday's SRBI auction, IDR29tn was awarded bids from a total bid of IDR37.4tn, indicating a lower bid level compared to the prior auction, where IDR25tn was awarded from a total bid of IDR39.9tn.
• On Friday’s Indo-GB series trading, FR96 and FR100 were notable in the bond market, experiencing high trade volumes of IDR3.89tn and IDR3.07tn, 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 : FR0087, FR0091, FR0096, FR0100 FR101.
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