Global Market Updates
• Wall Street equities closed with mixed results on March 22, with the DJI fell by -0.77%, the S&P 500 edged down by -0.14%, and the Nasdaq closed up by +0.16%.
• Stock indexes exhibited a varied performance, consolidating beneath Thursday's record highs. Nike dropped over -6% after warning of a sales decline, while Tesla fell more than -1% due to reduced production in China. Conversely, Nvidia soared over +3%, contributing positively to tech stocks.
• US Treasury 10-yr yields fell by 5 bps to 4.22%, while 2-yr yields declined by -3.0 bps to 4.59%. The 10-year yield briefly hit a one-week low at 4,19% on Friday, buoyed by European bond strength and increased safe-haven demand amid stock weakness.
• From Europe, The Swiss National Bank's decision to cut its key interest rate by 25 bps to 1.50% Thursday caught markets off guard, causing its currency to lose ground against the US dollar.
• In January, the German import price index was unchanged by monthly basis and fell -5.9% YoY beating expectations of -0.4% MoM and -7.5% YoY, respectively.
• Bundesbank President Nagel noted the rising probability of the ECB's first interest rate cut before August's. However, he cautioned investors against assuming such action will be repeated in future meetings.
• Global bond yields moved lower on Friday; The German 10-yr bund yield fell by -8.2 bps to 2.32%, the UK 10-yr gilt yield fell by -6.7 bps to 3.93% and the Japanese 10-yr JGB yield relatively flat at 0.74%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on March 22, with the 10-yr benchmark yield closed up by +2.10 bps to 6.64%, while 2-yr yield rose by +0.97 bps to 6.30%.
• The IDR depreciated against the USD at Friday’s close (USD/IDR rose by +0.77% to 15,780). We observed the Rupiah has weakened by more than 1% this week as the USD continued its upward trend against major global currencies, including Asia.
• Based on settlement data up to March 21, 2024, BI recorded foreign fund flows. Non-residents net sold IDR24.92tn on the SBN market, net bought IDR27.93tn on the stock market, and net bought IDR21.93tn on SRBI.
• BI reported that the M2 money supply in February 2024 reached IDR8,739.6tn, growing by 5.3% YoY, relatively stable from January's 5.4% YoY. This growth was driven by a 5.2% YoY increase in narrow money (M1) and a 5.3% YoY rise in quasi-money. Additionally, the 11.0% surge in credit distribution significantly fueled M2 expansion.
• The government will conduct an auctions of State Bonds (SUN) in local currencies Tuesday. The auctions will involve the reopening of the following 7 series: SPN12240628, SPN12250314, FR101, FR100, FR98, FR97, and FR102. We estimate the bid-to-cover ratio to be in the range of 2.2x-2.7x.
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, FR0099, FR0096, FR0098, FR0083, FR0097.
Disclaimer On
