20 November 2023
Fixed Income Report November 20, 2023
Global Market Updates
• Wall Street equities exhibited fluctuations Friday (Nov 17, 2023), DJI edged +0.01%, S&P 500 rose +0.13%, and Nasdaq climbed +0.03%. Energy stocks shined Friday following a more than +4% surge in crude prices.
• US Treasury 10-yr yields slid 4 bps to 4.44%. Conversely, shorter-termed UST 2-yr yields edgedupby 3 bps to 4.89%.
• Bond yields dropped precipitously supported by better-than-expected US inflation news and weekly jobs data, suggesting a slowing labor market have increased anticipation that the Fed will conclude its tighter monetary policy.
• Oct-23 US housing starts exceeded expectations, rising by +1.9% MoM to 1.37Mn. Additionally, US Oct-23 building permits increased +1.1% to 1.49Mn.
• Fed’s remarks Friday had mixed tones, Fed’s Daly, in favor of maintaining the pause on rate hikes, was countered by a contrasting sentiment from Fed’s Boston.
• Most Asian currencies strengthened this week due to capital flows to EM, influenced by US economic indicators that provided a dovish sentiment.
• Global bond yields primarily closed lower; the German bund 10-yr yield decreased -0.2 bps to 2.59%, the UK gilt 10-yr yield fell -4.7 bps to 4.10%. The Japanese GB 10-yr yield also dropped by -3.5 bps to 0.76%.
Domestic Market Updates
• Indonesian benchmark series of LCY government flattened Friday (Nov 17, 2023), as the 10-yr benchmark yield held steady at 6.94%.
• IDR appreciated against the USD (USD/IDR rose 0.33% to 15,493) Friday (Nov 17, 2023) as a result of US sloping inflation and foreign net buys recorded at IDR7.3tn according to BI data (13-16 Nov 2023).
• Foreign net buy record of IDR7.3tn comprised of: SBN IDR2.49tn, stocks IDR0.89tn, and SRBI IDR3.97tn. This marked the highest record since the first week of May-23, spanning over the last six months.
• SBN-backed asset, SRBI, shimmered, received IDR8.5tn in awarded bids during its Friday auction, which featured a wider range of bidding rates compared to the IDR6.0tn in the previous week.
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 6.80-6.90% for today.
• Attractive Indo GB series to be traded today : FR0040, FR0081, FR0096, FR0100.
Disclaimer On
FR40
FR81
FR96
FR100
