Company Update

21 Maret 2024

Fixed Income Report March 21, 2024

Global Market Updates
• Wall Street equities closed higher on March 20, with the DJI closed up by +1.03%, the S&P 500 rose by +0.89%, and the Nasdaq surged by +1.25%.
• US stocks broadly soared on Wednesday, with the S&P 500, DJI, and Nasdaq reaching to new all-time highs. The market surged in the afternoon following the FOMC’s announcement to maintain its projections for a 75 bps interest rate cut this year. Furthermore, the FOMC revised its 2024 US GDP forecast upwards, reinforcing expectations for an economic soft landing.
• US Treasury 10-yr yields fell by -3.0 bps to 4.27%, while 2-yr yields dropped by -9.0 bps to 4.59%. Treasury yields posted moderate gains after the FOMC meeting announcement, further boosted by rallies in European govt’s bonds.
• The FOMC raised its 2024 GDP forecast to 2.1% from 1.4% projected in December, and increased its 2024 core PCE inflation forecast to 2.6% from 2.4% previously. Additionally, they lowered their unemployment rate forecast for 2024 to 4.0% from 4.1%.
• US weekly MBA mortgage applications fell by -1.6% in the week ending March 15. The purchase mortgage sub-index dropped by -1.2%, and the refinancing sub-index fell by -2.5%. Meanwhile, the average 30-year fixed-rate mortgage rose to 6.97% from 6.84% in the previous week.
• Global bond yields moved lower on Wednesday; The German 10-yr bund yield fell by -1.8 bps to 2.43%, the UK 10-yr gilt yield fell by -4.7 bps to 4.01% and the Japanese 10-yr JGB yield edged down by -0.10 bps to 0.74%.

Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on March 20, with the 10-yr benchmark yield closed up by +0.33 bps to 6.64%, while 2-yr yield fell -2.63 bps to 6.30%.
• The IDR depreciated against the USD at Wednesday’s close (USD/IDR rose by +0.04% to 15,723). The Rupiah weakened post-BI rate announcement and ahead of awaited Fed meeting, while DXY trended higher at 103.9 since last Friday.
• The BI RDG concluded with the decision to maintain the BI-Rate at 6.00%, aimed at preserving Rupiah stability and ensuring controlled inflation. Meanwhile, BI also projects Indonesia's economic growth in 2024 to range between 4.7% and 5.5% YoY. This growth is fueled by robust domestic demand, particularly in household consumption and investment.
• In Wednesday's Indo-GB series trading, FR100 and FR101 garnered significant attention in the bond market outright transaction, with substantial trade volumes of IDR3.96tn and IDR2.02tn, respectively. Meanwhile, FR102, FR81, and FR77 maintained 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, FR0068, FR0098, FR0083, FR0097.

Disclaimer On

FR77 FR81 FR64 FR68 FR98 FR83 FR97

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