Global Market Updates
• Wall Street equities closed with a modest gain on March 27, with the DJI surged by +1.22%, the S&P 500 rose by +0.86%, and the Nasdaq closed up by +0.51%.
• Stock indexes closed moderately higher, supported by lower T-note yields. Nvidia's 2% decline weighed on technology stocks, limiting gains in the Nasdaq 100. End-of-quarter rebalancing and window dressing by stock fund managers boosted stock prices ahead of Thursday's Q1 close. US stocks also benefited from a rally in European stocks, with the Euro Stoxx 50 hitting a new 23-year high.
• US Treasury 10-yr yields slid by -4 bps to 4.20%, while 2-yr yields decreased by -2.0 bps to 4.54%. The 10-yr gained support from solid demand at the Treasury’s USD43bn 7-year T-note auction, which cleared at 4.18%.
• US weekly MBA mortgage applications dipped by -0.7% for the week ending March 22. The refinancing mortgage sub-index saw a decline of -1.6%, while the purchase mortgage sub-index dropped by -0.2%.
• Meanwhile, the average 30-year fixed-rate mortgage dropped by -4 bps to 6.93% from 6.97%.
• In Asia, India’s bond will join to two major global indexes, which anticipated to attract significant inflows. They will debut in the JPMorgan Govt Bond Index-EM in June, followed by inclusion in Bloomberg Index Services GB-EM LCY index in January next year.
• Global bond yields moved lower on Wednesday; The German 10-yr bund yield slid by -5.8 bps to 2.29%, the UK 10-yr gilt yield fell by -3.9 bps to 3.93% and the Japanese 10-yr JGB yield closed down by -1.4 bps to 0.73%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on March 27, with the 10-yr benchmark yield closed up by +3.81 bps to 6.71%, while 2-yr yield rose by +1.00 bps to 6.30%.
• The IDR drawn back against the USD (USD/IDR rose by +0.41% to 15,855). The Rupiah weakened Wednesday, hitting its lowest level since November 2023, as markets anticipate USD strength amidst sticky inflation and interest rate concerns.
• The Q1 2024 OJK Banking Business Orientation Survey (SBPO) indicates a potential increase in the NPL ratio post-pandemic COVID-19 credit restructuring which ended this week, despite maintained credit quality reflected in the optimistic IPR of 53.
• In Wednesday's Indo-GB series trading, FR100 and FR97 garnered considerable interest in outright transactions, with substantial trade volumes of IDR4.07tn and IDR2.89tn, respectively. Additionally, FR102, PBS36, and FR97 saw high trading frequency.
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 : FR0081, FR0056, FR0095, FR0101, FR0096, FR0098.
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