Company Update

08 Mei 2024

Fixed Income Report May 8, 2024

Global Market Updates    
• Wall Street equities closed mixed on May 7, as the DJI edged up by +0.08%, the S&P 500 rose by +0.13%, and the Nasdaq closed down by -0.10%. 
• US stocks ended Tuesday’s session nearly unchanged with the S&P 500 reached a three-week high, while DJI hit a four-week high. Investors remained cautious, assessing the sustainability of the recent market rally amid economic data. Fed’s Kashkari’s hawkish comments on Tuesday questioned current Fed policies ability to achieve the 2% inflation target, suggesting interest rates may stay unchanged until inflation aligns.
• The 10-yr UST yields declined by -2.0 bps to 4.47%, while 2-yr yields remained unchanged at 4.82%. Traders are focusing on the prospect of Fed interest rate cuts this year following softer-than-expected labor data.
• Meanwhile, traders are closely monitoring comments from Fed officials for insights into the timing of the first rate cut. The probability of a rate cut in September is currently estimated at around 65%.
• In March, US consumer credit increased by USD6.3bn, falling short of expectations for a USD14.8bn increase.
• In Europe, Eurozone March retail sales rose by 0.8% MoM surpassing expectations of +0.7% MoM and marking the largest rise in 1-1/2 years, pointing to some strength from the European consumer and aligning with other economic data releases that reflect some traction in the bloc’s economy.
• Global bond yields moved higher on Tuesday, The German bund yield fell by -4.9 bps to 2.42%, while the 10-yr UK gilts yield declined by -9.7 bps to 4.12%. The Japanese 10-yr JGB yield closed down by -2.8 bps 0.87%.
Domestic Market Updates
• The Indonesian benchmark series of LCY government bonds closed lower on May 7, with the 10-yr benchmark yield rose by +2.06 bps to 6.92%, marking a spread of +245 bps from the UST 10-yr yield at 4,47%.
• The IDR weakened against the USD at Tuesday’s close (USD/IDR rose by +0.15% to 16,049). The rupiah weakened on global sentiment of potential Fed rate cuts this year, while SBN market saw positive movement with declining yields across most tenors.
• BI is expected to release April's forex reserve position today, which could potentially decrease further due to BI's interventions in both the spot and NDF markets. Meanwhile, the March reserve position has already eroded to USD140.4bn.
• In Tuesday's Indo-GB series trading, FR081 and FR098 attracted significant interest in outright transactions, with the highest trade volumes of IDR3.25tn and IDR.71tn, respectively. Furthermore, FR081, FR0100, and PBS038 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, FR0090, FR0059, FR0064, FR0095. 
Disclaimer On

FR81 FR90 FR59 FR64 FR95

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