HIGHLIGHTS
- Yield of 10-year Indonesia Government Bonds is 7.138% on October 31, 2023, vs 7.119% the day before. While at the same time the 10-year UST yield 4.88% Stable compared to the previous day.
- Government bonds volume was IDR45.63 trillion, and it was dominated by short term (< 5 years). It was advanced than the previous day transaction of IDR21.45 trillion. The volume lower than its YTD average of IDR46.04 trillion. while the outright transaction reached IDR24.17 trilion increased from the previous day's transaction which amount to IDR7.96 trilion.
- Meanwhile, the total volume of corporate bonds was recorded at IDR4,468.63 billion, dominated by short term (< 5 years). The transaction volume dropped compared to the previous day's volume of IDR5,459.07 billion. The volume higher compared to this year's average of IDR1,989.15 billion. Meanwhile, outright transaction recorded at IDR4,468.63 billion fell from the previous day's transaction of IDR5,459.07 billion.
- The Rupiah exchange rate against the US Dollar by 0.03% strengthened to IDR15,885 from IDR15,890 while the JCI was up 0.24% from 6,736 to 6,752. Then Brent fell from 89.24 to 89.03 USD per barrel, while WTI Cushing Crude Oil Spot price declined from 85.54 to 82.31 USD per barrel.
GLOBAL UPDATES
- Bank of Japan tweaked their Yield Curve Control to increase the reference limit to 1% from 0.5%. The new policy will let the 10y JGB yield to surpass 1% for the first time since 2012. Bank of Japan will discontinue its unlimited bond purchase when the yield reach 1% and only conduct nimble market operations. (Reuters)
- China NBS (official) Manufacturing PMI fell to 49.5 in October 2023 from 50.2. The slowdown came with Golden Week that was happening in October, where factories when through 10-days of holiday. New export and import continue to shrank for eight consecutive months. (Reuters)
- Eurozone GDP growth in 3Q23 is lower than expected. Output decline -0.1% q-q (vs 2Q's 0.2% | Cons: 0%) but still rose 0.1% y-y (vs 2Q's 0.5% | Cons: 0.2%). The quarterly contraction is the first since 2020, weighed by output shrink in Germany. (Bloomberg)
- Eurozone CPI rose 2.9% y-y in October 2023, lower than consensus at 3.1% (Sep-23: 4.3%). Core inflation also fell but remain high at 4.2% y- (vs. Sep's 4.5%). (Bloomberg)
DOMESTIC UPDATES
- The government has conducted an auction of Government Securities on October 31, 2023, showing a total incoming bid of IDR35.87 trillion, higher than the previous auction on October 17, 2023, of IDR16.99 trillion. The series that has the largest incoming bid is the new series FR0101 by the government with a yield range of 6.99% - 7.40%, the incoming bid reached IDR12.94 trillion and was followed by FR0100 and SPN12240725 which attracted bids of IDR6.60 trillion and IDR3.63 trillion, respectively. with a yield range of 7.05% - 7.45% for the FR0100 series and the SPN12240725 series has a yield range of 6.60% - 7.05%. While the nominal won in this auction amounted to IDR19.3 trillion, higher than the target of IDR19 trillion and higher than the previous auction of IDR10.2 trillion. thus, the bid-to-cover ratio of this auction is 1.86x.
- According to the Ministry of Industry, the Industrial Confidence Index fell to 50.7 in October 2023, down 1.81 points from 52.51 in September. Slowing global growth, particularly from Indonesia's main trading partner, as well as lower domestic demand, all contributed to the drop. Higher fuel prices and rising fund costs as a result of higher interest rates raise production costs. Raw material import prices rise as the Rupiah depreciates. (Bisnis)
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