Global Market Updates
• Wall Street equities closed with a modest gain on March 6, with the DJI inched up by +0.20, the S&P 500 rose by +0.51%, and the Nasdaq closed up by +0.58%.
• Stocks inched higher as bond yields fell after the ADP employment report, which showed fewer than expected workers hired in February, a dovish factor for Fed policy. Fed Chair Powell’s statement about potentially cutting interest rates later in the year further supported the stock market and led to a decline in bond yields.
• On Wednesday, US Treasury 10-yr yields fell by -2.0 bps to 4.11%, while 2-yr yields rose by +1.0 bps to 4.55%. The short-term UST yields remained flat after Powell’s remarks, while longer-term yields experienced a slight decline.
• The US February ADP employment change rose by 140,000, falling slightly short of the expected increase of 150,000.
• The US Jan JOLTS job openings fell -26,000 to 8.863mn, showing a slightly stronger labor market than expectations of 8.850mn.
• Eurozone retail sales in January rose by 0.1% compared to the previous month, falling short of expectations for a 0.2% increase.
• Global bond yields moved lower on Wednesday; The German 10-yr bund yield fell by -0.2 bps to 2.32%, the UK 10-yr gilt yield slipped by -2.0 bps to 3.99% and the Japanese 10-yr JGB yield rose by +1.0 bps to 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Wednesday (March 6, 2024), with the 10-yr benchmark yield rose +0.82 bps to 6.64%, followed by 2-yr yield edged up +0.13 bps to 6.26%.
• The IDR appreciated against the USD at Wednesday’s close (USD/IDR fell by +0.44% to 15,700). The Rupiah strengthened while markets awaits Fed’s Powell testimony on Wednesday for clues on interest rates.
• The social protection assistance in the form of IDR200,000 per month Direct Cash Assistance (BLT) for Food Risk Mitigation, which will be distributed every three months amounting to IDR600,000, is reported to be disbursed in March 2024 during Ramadhan.
• In Wednesday's Indo-GB series trading, FR96 and FR100 were notable in the bond market, with substantial trade volumes of IDR4.82tn and IDR1.15tn, respectively. Meanwhile, FR81, FR91, and FR102 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 6.55-6.70% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0095, FR0071, FR00101, FR0096, FR0075, FR0097.
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