Global Market Updates
• Wall Street equities were mixed on March 13, with the DJI edged up by +0.10, the S&P 500 inched down by -0.19%, and the Nasdaq closed down by -0.54%.
• Wednesday saw US stocks under downward pressure as the 10-year Treasury note rose and a major chip stocks experienced a sell-off of exceeding -2%. Nonetheless, the DJI Average found support from blue-chip stocks like 3M, which gained by +5.42%.
• US Treasury 10-yr yields rose by +3.0 bps to 4.19%, followed by 2-yr yields surged by +3.0 bps to 4.61%. Yield upticks are expected leading up to the next FOMC decision, particularly if there’s an unexpected rise in PPI tomorrow.
• T-note prices were pressured by excess supply from the Treasury's presence in the market on Wednesday, compounded by robust corporate bond issuances.
• The Treasury sold USD25bn of 30-year T-bonds on Wednesday, following the sale of USD54bn of 3-year T-notes on Monday and USD42bn of 10-year T-notes on Tuesday.
• In China, investors are grappling with retail developers' challenges. Country Garden Holdings Co. missed its first yuan bond coupon payment, and China Vanke Co. is in talks for a debt swap to avert its inaugural bond default.
• Global bond yields were mixed on Wednesday; The German 10-yr bund yield rose by +1.7 bps to 2.34%, the UK 10-yr gilt yield grew by +7.5 bps to 4.02% and the Japanese 10-yr JGB yield fell by -0.30 bps to 0.77%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Wednesday (March 13, 2024), with the 10-yr benchmark yield rose +0.57 bps to 6.62%, while 2-yr yield rose +2.30 bps to 6.25%.
• The IDR appreciated against the USD at Wednesday’s close (USD/IDR fell by -0.08% to 15,578). The Rupiah strengthened while other Asian currencies weakened, while the dollar index strengthened following seven consecutive days of decline.
• The Consumer Survey by Bank Indonesia in February 2024 indicates that consumer confidence in the economy remains strong. This is reflected in the CCI for Feb-24, which is in the optimistic zone (>100) at the level of 123.1.
• During Wednesday’s SUN auction, investors exhibited considerable interest, securing winning bids totaling IDR24tn out of a total bid of IDR58.93tn. The series auctioned includes SPN03240613 (new issuance), SPN12250314 (new issuance), FR101 (reopening), FR100 (reopening), FR98 (reopening), FR97 (reopening), and FR102 (reopening). Furthermore, FR100 secured the highest awarded bid, boasting a bid-to-cover ratio of 2.14 and awarded IDR9.10tn from the total bid of IDR19.43tn
• In Wednesday's Indo-GB series trading, FR100 and FR101 were notable in the bond market, with substantial trade volumes of IDR13.76tn and IDR10.95tn, respectively. Meanwhile, FR102, FR81, and FR77 saw significant trading activity.
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 : FR0077, FR0081, FR0095, FR0071, FR00101, FR0096, FR0083, FR0097.
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