Company Update

02 Mei 2024

Fixed Income Report May 2, 2024

Global Market Updates   
• Wall Street equities saw varied performance on May 1, with the DJI rose by +0.23%, the S&P 500 slipped by -0.34%, and the Nasdaq closed down by -0.33%. 
• US stocks closed with a mixed bag on Wednesday amid concerns over prolonged higher interest rates and signals of a robust labor market. Additionally, the unexpected rise in the April ISM prices paid sub-index to 60.9, compared to the expected decline to 55.4, underscores persistent inflationary pressures, further shaping market sentiments.
• US Treasury 10-yr yields fell by -6.0 bps to 4.63%, while 2-yr yields dipped by -8.0 bps to 4.96%. Treasuries rallied due to weaker-than-expected US economic data, including March's JOLTS job openings and April's ISM manufacturing index.
• The FOMC, as expected, kept its benchmark interest rate unchanged at 5.25%-5.50%, the highest level in 23 years, during its recent two-day policy meeting, citing ongoing challenges in reaching its 2% inflation target.
• In the week ending April 26, US MBA mortgage applications fell by -2.3%, with both purchase and refinancing sub-indexes dropping. The average 30-yr fixed-rate mortgage increased to 7.29% from 7.24% in the prior week.
• In April, US ADP employment change exceeded expectations at +192,000, with March revised upward to +208,000. However, March's JOLTS job openings fell to a 3-year low of 8.48mn, below expectations.
• In Asia, China's manufacturing PMI in April edged up slightly to 50.4, surpassing the anticipated 50.3. However, the non-manufacturing PMI dipped to 51.2, falling short of the expected 52.3.
• Global bond yields were mixed on Wednesday; The German bund did not trade Wednesday due to Labor Day holiday, while the UK 10-yr gilt yield grew by +1.90 bps to 4.37% and the Japanese 10-yr JGB yield fell by -1.20 bps to 0.89%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on April 30, with the 10-yr benchmark yield  surged by +1.75 bps to 7.22%.
• The IDR weakened against the USD at Tuesday’s close (USD/IDR rose by +0.03% to 16,260), reflecting the DXY’s 0.14% gain before the FOMC meeting, driven by expectations of prolonged higher interest rates, pushing the USD to a 1.33% increase in April.
• In Tuesday’s SVBI auction, USD303mn was awarded from a total bid of USD305mn. This bid volume decreased compared to the previous auction, where USD489mn was awarded from a bid total of USD514mn.
• During Tuesday’s SUN auction, investors securing winning bids totaling IDR21.5tn out of a total bid of IDR50.19tn. The series auctioned includes new issuances of SPN03240801 and SPN12250502, along with the reopening of FR101, FR100, FR98, FR97, and FR102. Notably, FR101 achieved the highest awarded bid, with a bid-to-cover ratio of 1.69, receiving IDR8.45tn out of the total bid of IDR14.26tn.
• In Tuesday's Indo-GB series trading, FR0101 and FR0100 attracted significant interest in outright transactions, with the highest trade volumes of IDR8.99tn and IDR8.59tn, respectively. Furthermore, FR0100, FR0098, and FR0081 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 7.05-7.25% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0059, FR0095, FR0082, FR0096, FR0098. 
Disclaimer On

FR81 FR59 FR95 FR82 FR96 FR98

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