Global Market Updates
• Wall Street equities closed with modest gains on March 18, with the DJI rose by +0.20%, the S&P 500 surged by +0.63%, and the Nasdaq closed up by +0.82%.
• Stocks closed moderately higher, with megacap technology shares leading the charge. Tesla soared over 6% on news of an impending price hike for its Model Y cars in April. Meanwhile, Alphabet jumped more than 4% on reports suggesting discussions between Apple and Google regarding the integration of Google's Gemini AI engine into the iPhone.
• US Treasury 10-yr yields rose by +3.0 bps to 4.34%, while 2-yr yields edged up by +1.0 bps to 4.73%. The 10-yr yield rose on the robust NAHB housing market index, while short-term yields remained flat ahead of this week’s two-day Fed meeting, with no rate cut expected.
• The US March NAHB Housing Market Index unexpectedly surged by 3 points to reach an 8-month high of 51, surpassing expectations of no change at 48.
• Meanwhile, China's February industrial production surged by 7.0% year-over-year, surpassing expectations of a 5.2% year-over-year increase.
• In Japan, today’s BOJ meeting may signal the end of negative rates or hint at a future increase. Governor Ueda and the board are expected to raise rates from -0.1% to 0-0.1%, with markets already factoring in this change after strong wage data last week.
• Global bond yields are mixed on Monday; The German 10-yr bund yield surged by +1.8 bps to 2.46%, the UK 10-yr gilt yield fell by -1.2 bps to 4.09% and the Japanese 10-yr JGB yield closed down by -1.90 bps to 0.77%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on March 18, with the 10-yr benchmark yield edged up by +0.04 bps to 6.64%, while 2-yr yield rose +2.64 bps to 6.34%.
• The IDR depreciated against the USD at Monday’s close (USD/IDR rose by +0.61% to 15,690). The Rupiah is pressured by speculation from strong inflation readings, while markets widely anticipate the Fed to hold rates.
• Bank Indonesia reported an increase net liability of Indonesia’s International Investment Position (PII) of USD260.3 billion (19.0% of GDP) in 4Q23, up from USD250.1 billion (19.0% of GDP) in 4Q22.
• In Monday's Indo-GB series trading, FR102 and FR96 garnered significant attention in the bond market, with substantial trade volumes of IDR1.83tn and IDR1.67tn, respectively. Meanwhile, FR81, FR102, and FR77 continued to maintain high 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, FR0064, FR00101, FR0083, FR0097, FR102.
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