Global Market Updates
• Wall Street equities exhibited a mixed performance on Tuesday’s close (Jan 2, 2024), DJI closed up, +0.07%, S&P 500 fell -0.57%, and Nasdaq closed down by -1.68%.
• Stocks settled mixed as a sell-off in tech stocks exerted pressure on the overall market, yet pharmaceutical stocks bolstered the DJI into positive territory.
• US Treasury 10-yr yields inched up by +7 bps, reaching 3.95%, while the shorter-termed UST 2-yr yields climbed by +10 bps hitting 4.33%.
• The 10-yr yields rose as trading for 2024 commenced, with lingering uncertainties regarding the future of interest rates and the economic landscape.
• The December S&P manufacturing PMI was unexpectedly revised downward to 47.9, contrary to expectations for an upward revision to 48.4. Nov construction spending increased by +0.4% MoM, falling short of the anticipated +0.6% MoM.
• Global bond yields on Tuesday moved higher; the German bund 10-yr yield rose by +4.3 bps to 2.06%, the UK gilt 10-yr yield edged up by +10.1 bps to 3.63%. The Japanese GB 10-yr yield remained unchanged at 0.61%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Tuesday (Jan 2, 2024), with the 10-yr benchmark yield surged +10.70 bps to 6.56%.
• IDR weakened against the USD (USD/IDR rose by +0.73% to 15,470) at Tuesday’s close, as market participants awaited further signals on potential interest rate cuts.
• BPS recorded December 2023's inflation at 2.61%, significantly lower than the previous year's 5.51%. Monthly inflation increased by +0.41% MoM/+2.61% YoY.
• The SVBI auction on the first trading day of 2024 garnered considerable market interest, resulting in a total awarded amount of USD31mn, higher than the previous auction’s USD13mn. However, this amount remained below the indicative target of USD 50 million.
• On Tuesday’s Indo GB series trading, FR101 and FR100 led the bond market with high trade volumes of IDR3.59tn and IDR1.17tn, respectively. Additionally, FR77 and FR81 also maintained notable 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 6.45-6.60% for today.
• Attractive Indo GB series to be traded today : FR0040, FR0081, FR0096, FR0100.
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