Global Market Updates
• Wall Street equities ended higher on March 1, with the DJI rose by +0.23%, the S&P 500 closed up by +0.80%, while the Nasdaq surged by +1.14%.
• Stock indexes posted strong gains on Friday, with the S&P 500 and Nasdaq 100 reaching new record highs. Weaker-than-expected US economic news for February, including the ISM manufacturing index and the University of Michigan's consumer sentiment index, caused bond yields to drop. This development boosted expectations for Fed rate cuts. Chip stocks performed particularly well, leading the technology sector higher on the back of optimism surrounding AI demand and the lower bond yields.
• US Treasury 10-yr yields fell by -6.0 bps to 4.19%, followed by 2-yr yields dropped by 10.0 bps to 4.54% on Friday. T-yields fell after economic data release and Fed’s Bostic comments supporting a hawkish stance on interest rates.
• The US February ISM manufacturing index unexpectedly dropped by 1.3 to 47.8, falling short of the expected increase to 49.5. US January construction spending unexpectedly fell by 0.2% MoM, weaker than the expected 0.2% increase.
• The University of Michigan's US February consumer sentiment index was revised down by 2.7 to 76.9, falling short of expectations of no change at 79.6.
• Eurozone's February CPI eased to +2.6% YoY from +2.8% YoY in January, beating expectations of +2.5% YoY. Meanwhile, February core CPI eased to +3.1% YoY from +3.3% YoY in January.
• Global bond yields move lower on Friday; The German bund 10-yr yield edged up by +0.2 bps to 2.41%, and the UK gilt 10-yr yield inched down by -0.9 bps to 4.11%. The Japanese JGB 10-yr yield rose by +0.50 bps to 0.71%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Friday (Mar 1, 2024), with the 10-yr benchmark yield rose +0.02 bps to 6.61%, followed by 2-yr yield edged up +0.14 bps to 6.20%.
• Meanwhile, the IDR appreciated against the USD (USD/IDR fell by -0.10% to 15,700). The Rupiah strengthened over the weekend as inflation data was released.
• Statistics Indonesia (BPS) released CPI inflation for Feb-24 at 0.37% MoM, with an annual rate of 2.75% YoY. Meanwhile, core inflation for Feb-24 was 0.14% MoM, down from the previous month's 0.20% MoM.
• As of February 29, Bank Indonesia’s reports foreign flows indicated a net sell of IDR4.93tn in the SBN market, a net buy of IDR20.02tn in the stock market, and a net buy of IDR25.51tn in the SRBI.
• In Friday's Indo-GB series trading, FR97 and FR96 were notable in the bond market, with substantial trade volumes of IDR1.67tn and IDR1.39tn, respectively. Meanwhile, FR81, FR102, and FR77 saw significant 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 6.50-6.65% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0099, FR0071, FR00101, FR0072, FR0075, FR0097.
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