Global Market Updates
• Wall Street equities closed higher on March 12, with the DJI closed up by +0.61, the S&P 500 rose by +1.12%, and the Nasdaq jumped by +1.54%.
• US Stocks surged following the release of the US CPI report in February 2024, easing concerns that had been anticipated by some investors. Additionally, the core CPI dropped to its lowest level in 2-3/4 years. Furthermore, certain technology stocks received continued support due to positive news from Oracle regarding demand for cloud and artificial intelligence (AI) services.
• US Treasury 10-yr yields rose by +6.0 bps to 4.16%, followed by 2-yr yields surged by +7.0 bps to 4.58%. A stronger-than-anticipated US inflation report has driven up Treasury yields, indicating that a rate cut is unlikely at the upcoming FOMC meeting.
• Tuesday's US CPI report for February met expectations with a +0.4% monthly increase. However, headline inflation recorded at +3.2% YoY was slightly higher than the market's +3.1% expectation and up from January's +3.1% YoY.
• In February, US nonfarm payrolls rose by +275,000, exceeding the expected +200,000. The unemployment rate also increased to 3.9%, higher than the expected 3.7%.
• Global bond yields were mixed on Friday; The German 10-yr bund yield rose by +2.7 bps to 2.33%, the UK 10-yr gilt yield fell by -2.5 bps to 3.94% and the Japanese 10-yr JGB yield rose by +0.40 bps to 0.74%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Friday (March 8, 2024), with the 10-yr benchmark yield fell -0.66 bps to 6.61%, while 2-yr yield rose +2.21 bps to 6.23%.
• The IDR appreciated against the USD at Friday’s close (USD/IDR fell by -0.40% to 15,590). The IDR has strengthened for three consecutive days. On a weekly basis, the IDR has appreciated by 0.70%.
• During 2024, based on settlement data up to March 7, 2024, non-residents had a net selling of IDR12.51tn in the gov’t bond (SBN) market, a net buying of IDR17.88tn in the stock market, and a net buying of IDR25.35tn in the Indonesian government bond (SRBI) market.
• The government will again rise the value added tax (VAT) rate from 11% to 12%, which will take effect on January 1, 2025. This increase part of the government’s tax adjustment plans regulated in Law Number 7 of 2021 concerning Tax Regulation Harmonization (UU HPP).
• The IDX recorded 16 bond and sukuk issuances worth IDR16.78tn in 2024. The total listed issuances on the IDX were 550, valued at IDR468.84tn and USD32,362mn, from 128 issuers. Government securities (SBN) on the IDX totaled 186 series worth IDR5,829.60tn and USD502.10mn. Asset-backed securities (EBA) totaled 10 issuances worth IDR3.25tn.
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 : FR0081, FR0095, FR0071, FR00101, FR0096, FR0083, FR0097.
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