Global Market Updates
• Wall Street equities ended higher on March 21, with the DJI closed up by +0.68%, the S&P 500 rose by +0.32%, and the Nasdaq surged by +0.20%.
• Stocks remained bullish on Thursday, with the S&P 500, DJI, and Nasdaq Composite hitting new highs. The market surged as the FOMC upheld expectations of 75 bps in rate cuts this year. Strong US economic reports further supported the market, signaling resilience and improving prospects for an economic soft landing.
• US Treasury 10-yr yields fell by -0.2 bps to 4.27%, while 2-yr yields grew by +3.0 bps to 4.62%. Treasury notes initially rose Thursday, supported by FOMC's announcement and European bond rallies.
• The Fed is slowing quantitative tightening, capping monthly roll-offs at USD60bn in US Treasury bonds and USD35bn in mortgage-backed securities. Powell emphasizes this aims to ensure a smooth transition, reducing stress in money markets.
• US weekly initial jobless claims fell unexpectedly to 210,000, exceeding the expected increase to 213,000. Weekly continuing claims rose to 1.807mn, still below the forecasted 1.820mn.
• US March S&P Manufacturing PMI unexpectedly rose to 52.5, beating expectations of 51.8, while US February existing home sales surged to 4.38mn, surpassing forecasts of 3.95mn.
• Global bond yields declined on Thursday; The German 10-yr bund yield fell by -2.7 bps to 2.40%, the UK 10-yr gilt yield fell by -2.1 bps to 3.99% and the Japanese 10-yr JGB yield relatively flat at 0.74%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on March 21, with the 10-yr benchmark yield closed down by -2.36 bps to 6.62%, while 2-yr yield inched down by -0.30 bps to 6.29%.
• The IDR appreciated against the USD at Thursday’s close (USD/IDR fell by -0.35% to 15,660). The Rupiah rebounded after the Fed kept the interest rate unchanged as expected, conversely, the DXY fell to 103.3.
• BI observed increased household financing in their recent survey. In February 2024, the percentage of households acquiring debt/credit rose to 12.5% from 12.1% the previous month. Commercial banks remain the primary source of household financing, followed by leasing and cooperatives.
• KPU has announced the results of the 2024 Presidential Election on Wednesday. Prabowo Subianto-Gibran Rakabuming Raka, emerged as the winner after securing 96,214,691 votes, equivalent to 58.6% of the total valid national votes, which amounted to 164,227,475 votes.
• In Thursday's Indo-GB series trading, FR64 and FR56 garnered considerable interest in the bond market outright transaction, with substantial trade volumes of IDR3.37tn and IDR2.02tn, respectively. Meanwhile, FR102, FR81, and PBS36 experienced 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.
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