HIGHLIGHTS
- Yield of 10-year Indonesia Government Bonds is 6.673% on January 16, 2024, vs 6.672% the day before. Meanwhile, at the same time, UST the 10 year yield rose to 4.07%, from 3.96% the previous day.
- Government bonds volume was IDR76.33 trillion, and it was dominated by short term (< 5 years). It was was up than the previous day transaction of IDR22.95 trillion. The volume higher than its YTD average of IDR44.83 trillion. While the outright transaction reached IDR28.79 trilion was up from the previous day's transaction which amount to IDR6.47 trilion.
- Meanwhile, the total volume of corporate bonds was recorded at IDR640.49 billion, dominated by short term (< 5 years). The transaction volume fell compared to the previous day's volume of IDR3,476.50 billion. The volume lower compared to this year's average of IDR1,982.85 billion. Meanwhile, outright transaction recorded at IDR677.57 billion fell from the previous day's transaction of IDR3,476.48 billion.
- The Rupiah exchange rate against the US Dollar weakened by 0.23% to IDR15,591 from IDR15,555 while the JCI increased 0.26% from 7,224 to 7,243. Then Brent fell from 80.02 to 79.08 USD per barrel, while WTI Cushing Crude Oil Spot price stabilized from 72.68 to 72.68 USD per barrel.
GLOBAL UPDATES
- Unemployment rate in the United Kingdom remained unchanged at 4.2% in the three months leading up to November 2023, in line with market expectations. The number of unemployed individuals rose by 16,000 to 1.46 million, while employment levels advanced by 73,000 to 33.05 million. (Trading Economics)
- Median consumer expectations for Euro Area inflation over the next 12 months dipped to 3.2% in November 2023, marking the lowest rate since February 2022 and down from the previous month's 4.0%. Simultaneously, expectations for inflation three years ahead decreased to 2.2% from 2.5%, also hitting its lowest level since early 2022. (Trading Economics)
DOMESTIC UPDATES
- The results of the Government Securities auction on January 3, 2024 showed a total incoming bid of IDR67.56 trillion, higher than the previous auction on January 3, 2024 which showed a total incoming bid of IDR39.80 trillion. With a yield range of 6.48% - 6.73%, FR0101 is the series with the largest incoming bid. Its total bid amount was IDR23.59 trillion. FR0100 and SPN12250116 came in second and third, respectively, with bids of IDR16.71 trillion and IDR10.48 trillion. with a yield range of 6.83% - 6.83% for the FR0100 series and 6.90% - 6.49% for the SPN12250116 series. As for the nominal won in this auction of IDR24 trillion, the same as the target of IDR24 trillion but higher than the previous auction of IDR21.75 trillion. Thus the bid-to-cover ratio of this auction is 2.82x.
- Bank Indonesia is scheduled to announce its decision on the BI Rate at 2 PM today. We anticipate no changes in the interest rate during this announcement, and our stance remains unchanged, signalling no rate cut for the first half of 2024. Despite the reduction in external risks and apparent control over inflation, the stability of the Rupiah remains delicate. The emphasis on maintaining an adequate spread is deemed crucial to mitigate Rupiah volatility. We expect Bank Indonesia to underscore the timing of a potential rate cut, preferably in the second half, aligning with their statement from the previous month.
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