Global Market Updates
• Wall Street equities posted losses on March 25, with the DJI fell by -0.41%, the S&P 500 declined by -0.31%, and the Nasdaq closed down by -0.27%.
• Stock indexes fell moderately on Monday due to negative corporate news and hawkish Fed comments, which pushed T-note yields higher. Fed Bostic expects just one 25 bps rate cut this year, differing from the FOMC's projection of three, while Fed Cook cautioned against premature rate cuts, citing inflation risks.
• US Treasury 10-yr yields rose by +3 bps to 4.25%, while 2-yr yields up by +3.0 bps to 4.63%. Hawkish Fed comments raised T-note yields as investors await economic data amid hints of potential rate cuts, contingent on economic performance.
• US new home sales for February unexpectedly fell by -0.3% to 662,000, missing expectations for a rise to 677,000. This represents a -0.3% decline from January's figure of 664,000 sales.
• The US March Dallas Fed manufacturing outlook survey unexpectedly dropped to -14.4, a decline of -3.1, falling short of expectations for an increase to -10.0.
• In Asia, major central banks are addressing speculative forex moves. China's yuan rebounded with central bank support through a stronger-than-expected reference rate. Japan's top currency official criticized the yen's decline as speculative.
• Global bond yields moved higher on Monday; The German 10-yr bund yield rose by +4.9 bps to 2.37%, the UK 10-yr gilt yield grew by +6.0 bps to 3.99% and the Japanese 10-yr JGB yield closed down by -0.7 bps to 0.73%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on March 25, with the 10-yr benchmark yield closed up by +1.30 bps to 6.65%, while 2-yr yield rose by +0.95 bps to 6.31%.
• The IDR depreciated against the USD at Monday’s close (USD/IDR rose by +0.11% to 15,798). The rupiah continues to face pressure, with strong US economic data driving investors towards the US financial market further.
• Meanwhile, Indonesia’s 5-yr CDS has surged by +5.44% in a month, according to World Government Bonds data. This uptick in CDS might exert downward pressure on the rupiah due to foreign outflows in the government bond market.
• Japan Credit Rating Agency (JCR) has reaffirmed Indonesia's Sovereign Credit Rating as BBB+ with a stable outlook on March 22, 2024. This decision reflects JCR's confidence in Indonesia's ongoing economic strength, resilience, and the stability of its macroeconomic environment and financial system.
• In Monday's Indo-GB series trading, FR72 and FR100 garnered considerable interest in the bond market outright transaction, with substantial trade volumes of IDR2.46tn and IDR1.43tn, respectively. Meanwhile, FR102, FR77, 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, FR0099, FR0096, FR0098, FR0097.
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