HIGHLIGHTS
- Yield of 10-year Indonesia Government Bonds is 6.570% on September 17, 2024, vs 6.577% the day before.
- Government bonds volume was IDR90.02 trillion, and it was dominated by medium term (5-15 years). It was was up than the previous day transaction of IDR31.43 trillion. The volume higher than its YTD average of IDR45.74 trillion. While the outright transaction reached IDR53.42 trilion advanced from the previous day's transaction which amount to IDR16.14 trilion.
- Meanwhile, the total volume of corporate bonds was recorded at IDR2,431 billion, dominated by short term (< 5 years). The transaction volume increased compared to the previous day's volume of IDR1,007 billion. The volume higher compared to this year's average of IDR1,916 billion. Meanwhile, outright transaction recorded at IDR2,419 billion advanced from the previous day's transaction of IDR1,007 billion.
- The Rupiah exchange rate against the US Dollar strengthened by 0.42% to IDR15,335 from IDR15,400 while the JCI increased 0.25% from 7,812 to 7,832. Then Brent declined from 74.60 to 73.84 USD per barrel, while WTI Cushing Crude Oil Spot price advanced from 68.97 to 70.09 USD per barrel.
GLOBAL UPDATES
- US Retail sales edged up 0.1% m-m in August 2024, following an upwardly revised 1.1% surge in July, and beating forecasts of a 0.2% decline, signalling consumer spending remains relatively strong. Annually, the retail sales grew 2.1% y-y.
DOMESTIC UPDATES
- Trade Balance surplus widened to USD2.9bn in Aug-24, extended the surplus streak to 52 months. Cumulatively, Trade surplus reached USD18.8bn for 8M24 (vs. 8M23: USD24.3bn). Export surged to USD23.6bn in Aug-24, the highest since Dec-22, with an annual growth of 7.1% y-y (6.0% m-m). The surge came from non-O&G export, also reached highest value since Dec-22, with growth of 8.1% y-y and 7.4% m-m. O&G export declined by 8.7% y-y and 15.4% m-m. Import decreased to USD20.7bn in Aug-24 or -4.9% m-m, although still growing annually at 9.5%. Monthly decrease was seen in O&G and non-O&G imports (-25.6% and -0.9% m-m, respectively). Annually, O&G import was relatively unchanged while non-O&G import jumped by 11.1% due to 127% y-y growth in Ores, Slag, and Ash (HS 26). (BPS)
- BI Rate will be announced by Bank Indonesia today at 2pm. We expect Bank Indonesia to cut rate by 25bps due to the following factors: (1) BI has a history of using rate cuts to counter global economic slowdowns which are increasingly prevalent, which are becoming more frequent; (2) The need to signal growth support as domestic drivers weaken, with four months of deflation, sub-50 PMI for two consecutive months, household consumption growth under 5%, moderating middle class spending, and weaker government revenues affecting fiscal spending.; and (3) SRBI issuance remains modest despite strong incoming bids in the latest auction, signaling BI stance to reduce its contractionary policy. The 6-month SRBI yield has dropped below 7%, last seen before the recent rate hike. (BRIDS Economics Research)
- The government bond auction held on September 17 revealed that the total amount of bids received was IDR 63.70 trillion, an increase from the IDR 45.49 trillion recorded in the previous auction on September 3, 2024. The series attracting the highest amount of bids was FR0103, with a yield range of 6.51% to 6.67%, and total bids reaching IDR26.19 trillion. This was followed by series FR0104 and FR0098, which garnered IDR16.02 trillion and IDR5.44 trillion in bids, respectively. FR0104 had a yield range of 6.38% to 6.50%, while FR0098’s yield ranged from 6.65% to 6.77%. The total nominal awarded in this auction was IDR 22 trillion, aligning with the government’s target. As a result, the bid-to-cover ratio for this auction stands at 2.90x. (DJPPR)
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