Global Market Updates
• Wall Street equities saw a moderate declines on Wednesday’s close (Jan 3, 2024), DJI closed down, -0.76%, S&P 500 fell -0.80%, and Nasdaq closed lower by -1.06%.
• Stocks extended Tuesday’s losses, closing slightly lower after Wednesday’s mixed US economic news.
• US Treasury 10-yr yields decreased by -4 bps, setting at 3.91%, while the shorter-termed UST 2-yr yields remained steady at 4.33%.
• The 10-yr yields dropped haunted by the minutes of the Dec 12-13 FOMC meeting which the minutes didn’t indicate any likelihood of an immediate rate cut.
• The US Dec ISM manufacturing index rose +0.7 to 47.4, surpassing the expected of 47.1, while US Nov JOLTS job openings unexpectedly fell to -62,000 to 8.79mn, indicating a weaker labor market weaker than anticipated, of an increase to 8.82mn.
• Weekly MBA mortgage applications fell by -10.7%. Purchase applications dropped -7.6%, refinancing fell -18.1%, and the average 30-year fixed-rate mortgage rose to 6.76%.
• Global bond yields on Wednesday 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 Wednesday (Jan 3, 2024), with the 10-yr benchmark yield spiked +13.26 bps to 6.62%.
• IDR weakened against the USD (USD/IDR rose by +0.10% to 15,480) at Wednesday’s close. IDR closed lower in today’s trading as market players adopted a wait-and-see approach towards US data released.
• In 2023, the government raised IDR407tn in new debt, representing 58.4% of the 2023 state budget. Most of this debt came from SBN issuances that miss the target. By year-end 2023, total government debt reached IDR8,041tn, up 3.97% from IDR7,733tn at the close of 2022.
• Investors positively responded to the government's SBN securities issuance yesterday, garnering a total incoming bid of IDR39.8tn compared to the previous IDR41.1tn. Notably, FR100 securing the highest awarded bids of IDR8.6tn out of the total awarded amount of IDR7.6tn.
• On Wednesday’s Indo GB series trading, FR100 and FR101 led the bond market with high trade volumes of IDR7.64tn and IDR4.31tn, respectively. Additionally, FR100 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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