Company Update

14 Mei 2024

Fixed Income Report May 14, 2024

Global Market Updates     
• Wall Street equities closed near flat on May 13. While the DJI slipped by -0.21% and the S&P 500 edged down by -0.02%, the Nasdaq finished higher, rising by +0.29%. 
• Higher inflation expectations pressured stocks on Monday after the New York Fed reported a +26 bps increase in 1-year inflation expectations to 3.26%, up from March's 3.00%. Furthermore, hawkish comments from Fed Vice Chair Jefferson added to the stock decline. He emphasized the need to maintain the policy rate in restrictive territory, citing concerns about inflation reaching target levels.
• The 10-yr UST yields dropped by -2.0 bps to 4.48%, while 2-yr yields also decreased by -2.0 bps to 4.85%. Monday's T-note prices gained support from strong European government bonds and speculation of easing price pressures in the upcoming US PPI and CPI reports.
• This week, the market’s attention will be on US inflation reports. Tuesday's April core PPI is forecasted to ease to +2.3% YoY from March's +2.4% YoY. Wednesday's April core CPI is expected to decrease to +3.6% YoY from March's +3.8% YoY.
• Meanwhile, the markets are pricing in a 3.5% probability of a -25 bps rate cut for the June 11-12 FOMC meeting, and a 25% chance for the following meeting on July 30-31.
• In Asia, China's finance ministry announced the sale of 1tn yuan (USD138.24bn) in long-term special treasury bonds this week. Sales include seven tranches of 20-year bonds starting May 24, 12 tranches of 30-year bonds from May 17 to Nov. 15, and three tranches of 50-year bonds starting May 17.
• Global bond yields were mixed on Friday, The German bund yield fell by -0.7 bps to 2.51%, while the 10-yr UK gilts yield edged up by +0.9 bps to 4.17%. The Japanese 10-yr JGB yield closed up by +2.5 bps 0.94
Domestic Market Updates 
• The Indonesian benchmark series of LCY government bonds closed lower on May 13, with the 10-yr benchmark yield rose by +1.51 bps to 6.96%, marking a spread of +248 bps from the UST 10-yr yield at 4,48%.
• The IDR weakened against the USD at Monday’s close (USD/IDR rose by +0.22% to 16,080). The market retains a biased stance ahead of this week's release of US producer price index and consumer price index data, while the DXY remains steady at the 105 level.
• Bank Indonesia's April 2024 Consumer Survey shows increased consumer confidence in the economy, with the Consumer Confidence Index rising to 127.7 from 123.8 the previous month.
• In Monday's Indo-GB series trading, outright transactions continued to show a tepid demand. Leading in trade volume were FR0100 and FR0098, with IDR1.93tn and IDR1.85tn, respectively. Meanwhile, FR081, PBS038, and PBS036 exhibited a 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 6.85-7.10% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0059, FR0064, FR0095, FR0087, FR0091, FR0100. 
Disclaimer On

FR81 FR59 FR64 FR95 FR87 FR91 FR100

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