Company Update

15 Mei 2024

Fixed Income Report May 15, 2024

Global Market Updates     
• Wall Street equities ended higher on May 14, with the DJI rose by +0.32%, the S&P 500 grew by +0.48%, and the Nasdaq closed up by +0.75%. 
• US stocks closed higher Tuesday, with the S&P 500 hitting a 5-week high and the Nasdaq 100 a 1-month high. Gains were driven by falling bond yields after dovish comments from Fed Chair Powell, but limited by higher-than-expected April core producer prices. Markets now await the release of April core CPI later today, expected to ease to +3.6% YoY from +3.8% YoY in March.
• The 10-yr UST yields fell by -3.0 bps to 4.45%, while 2-yr yields slipped by -4.0 bps to 4.81%. Treasuries found support on Tuesday’s as Fed Chair Powell hinted at no immediate rate hike, countering initial pressure from higher-than-expected US core April PPI, signaling a more hawkish Fed stance.
• The April Producer Price Index (PPI) in the US climbed by +2.2% YoY, picking up from a downwardly revised 1.8% rise in March, aligning expectations. However, the core PPI excluding food and energy increased by +2.4% YoY, slightly exceeding the anticipated +2.3% YoY.
• Meanwhile, President Biden unveiled plans on Tuesday to impose tariffs on USD18bn worth of Chinese imports, spanning electric vehicles, steel, aluminum, semiconductors, medical devices, and other goods.
• In Asia, credit in China shrank in April as government bond sales slowed and loan expansion weakened. Aggregate financing decreased by nearly USD27.7bn from the previous month.
• Global bond yields were mixed on Tuesday, the German bund yield rose by +3.8 bps to 2.54%, while the 10-yr UK gilts yield edged down by -0.1 bps to 4.17%. The Japanese 10-yr JGB yield closed up by +1.6 bps 0.95%.
Domestic Market Updates 
• The Indonesian benchmark series of LCY government bonds closed lower on May 14, with the 10-yr benchmark yield surged by +4.02 bps to 7.00%, widening the spread to +255 bps above the UST 10-yr yield at 4,45%.
• The IDR depreciated against the USD at Tuesday’s close (USD/IDR rose by +0.15% to 16,104). The rupiah consolidates amidst recent changes as attention shifts to anticipated persistent US inflation data.
• During Tuesday’s SUN auction, investors securing winning bids totaling IDR21.3tn out of a total bid of IDR49.4tn. The series auctioned includes new issuances of SPN03240814, along with the reopening of SPN12250502, FR101, FR100, FR98, FR97, and FR102. Notably, FR100 achieved the highest awarded bid, with a bid-to-cover ratio of 2.88, receiving IDR6.05tn out of the total bid of IDR17.43tn.
• In Tuesday's Indo-GB series trading, FR0098 and FR0100 attracted significant interest in outright transactions, with the highest trade volumes of ID11.31tn and IDR9.07tn, respectively. Furthermore, FR0100, FR0081, and FR0101 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 6.85-7.10% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0059, FR0064, FR0095, FR0082, FR0065, FR0100. 
Disclaimer On

FR81 FR59 FR64 FR95 FR82 FR65 FR100

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