24 November 2023
Fixed Income Report November 24, 2023
Global Market Updates
• Wall Street was closed Thursday (Nov 23, 2023) on comemmoration of Thanksgiving Day. World shares indexes closed in the mix Thursday, with Germany’s DAX gaining 0.1% and FTSE edging 0.2% higher.
• Asian stock market opening is anticipated to be a mixed bag, with limited guidance from the US due to Thursday's holiday, whilst the dollar is showing signs of weakening. HSEI made up for their early loss, closing 1.0% higher, followed by SSEC that notched up by 0.6%.
• Investors are keeping a close eye on China's property market, especially following recent efforts to support the sector, which led to a surge in developer stocks earlier in the week. The 8.9% jump in Bloomberg Intelligence's measure tracking property developer stocks has heightened this focus.
• Global bond yields Thursday mainly climbed ; the German bund 10-yr yield hiked +5.9 bps to 2.62%, the UK gilt 10-yr yield climbed +10.2 bps to 4.26%. The Japanese GB 10-yr yield closed up by +2.40 bps to 0.75%.
• Crude prices was under the spotlight yesterday after slipping USD1/bbl following OPEC’s announced postponement of the planned production cuts meeting. We are of the view that oil demand might be on a declining trend, aligned with the expected weakening of the economy. This is reflected by the recent sharp jump in US crude inventory by 5.1mn barrels as of Nov 17, 2023 vs expectations of a modest 1.2mn barrels increase.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher Thursday (Nov 23, 2023), as the 10-yr benchmark yield fell 1.55 bps to 6.63%.
• IDR strenghthened against the USD (USD/IDR fell -0.13% to 15,555) Thursday (Nov 23, 2023), this appreciation was also backed by the influx of foreign capital through the SRBI instrument, contributing 15.2% of the total 178.8tn, amounting to 27tn.
• Thursday’s bond market attracted considerable attention from investors, FR87 and FR91 stand out as the most actively traded government bond series, boasting trading frequencies of 100x and 109x, respectively, compared to other series.
• On a week-to-date basis up to Nov 22, 2023, BI appears to have intervened in the domestic IDR nominated bond market by purchasing a total of IDR33.9tn. At the same time foreign influx was recorded IDR4.7tn.
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 6.50-6.70% for today.
• Attractive Indo GB series to be traded today : FR0040, FR0081, FR0096, FR0100.
Disclaimer on
FR40
FR81
FR96
FR100
