HIGHLIGHTS
- Yield of 10-year Indonesia Government Bonds is 6.515% on January 02, 2024, vs 6.480% the day before. Meanwhile at the same time UST the 10-yr yield rose to 3.95%, from 3.88% the day before due to lower PMI revision.
- Government bonds volume was IDR66.04 trillion, and it was dominated by short term (< 5 years). It was increased than the previous day transaction of IDR34.06 trillion. The volume higher than its YTD average of IDR44.83 trillion. While the outright transaction reached IDR9.16 trilion declined from the previous day's transaction which amount to IDR10.08 trilion.
- Meanwhile, the total volume of corporate bonds was recorded at IDR1,506.20 billion, dominated by short term (< 5 years). The transaction volume dropped compared to the previous day's volume of IDR3,616.55 billion. The volume lower compared to this year's average of IDR1,982.85 billion. Meanwhile, outright transaction recorded at IDR1,496.20 billion dropped from the previous day's transaction of IDR3,611.15 billion.
- The Rupiah exchange rate against the US Dollar weakened by 0.47% to IDR15,470 from IDR15,397 while the JCI increased 0.70% from 7,273 to 7,324. Then Brent declined from 79.06 to 77.60 USD per barrel, while WTI Cushing Crude Oil Spot price dropped from 71.77 to 71.65 USD per barrel.
GLOBAL UPDATES
- Manufacturing PMI in December 2023 (vs November). US’ US Manufacturing PMI was revised lower to 47.9 (vs. preliminary of 48.2 and Nov’s 49.4), output returned to decline and the downturn in new orders gathered pace, reflecting weakness in both domestic. PMI China’s PMI rose to 50.8 (vs. 50.7), output rose the most in seven months and new orders rose at the fastest pace since February. Euro’s PMI rose steadied at 44.4 (vs. 44.2), output contraction and job losses continued. UK’s PMI fell to 46.2 (vs. 47.2), production declined driven by downturns in the consumer and intermediate goods sub-industries. (Trading Economics)
DOMESTIC UPDATES
- On January 3, 2024, a government auction of Government Securities (SUN) is scheduled for Wednesday. At this auction, the new FR0102 series will be offered, along with the following series: FR0101 (Reopening), FR0100 (Reopening), FR0098 (Reopening), FR0097 (Reopening), SPN03240404 (New Issuance), and FR0102 (New Issuance). The Government then set a target of IDR 25 trillion for this auction, with a maximum target of IDR 37.50 trillion. In contrast to the previous auction on November 28, 2023, which revealed a total incoming bid of IDR 48.71 trillion, the government held an auction of government securities on December 12, 2023, with a total incoming bid of IDR 41.18 trillion. Based on current macroeconomic conditions, BRI Danareksa Sekuritas estimates the total incoming bid for this auction to be between IDR40 trillion and IDR50 trillion, with a bid-to-cover ratio between 1.60x and 2.00x.
- Inflation in December 2023 was recorded at 2.61% y-y / 0.41% m-m, inline with our estimates of 2.56% (Cons: 2.82%). Core inflation follows a continued disinflation trend, reaching a 23-month low at 1.80% y-y. The main contributor to the annual inflation remained unchanged in December.
- Volatile Food inflation eased to 6.73% y-y/1.42% m-m, after reaching a 9-month high in November. Chili prices continued to become the main contributor in the monthly inflation as rice price remained stable. Administered Price inflation decreased to 1.72% y-y (vs Nov's 2.12%) but exhibited monthly acceleration due to 4.67% m-m increase in airplane tariffs, contributing around 15% to the overall monthly inflation, equivalent to the contribution of red chili.
- Gov't State Budget deficit reached IDR480tn for FY2023, translated to 1.65% to GDP, well below the target of 2.3%. Overall revenue realization grew by 5.3% to IDR2,774.3 trillion, accounting for 105.2% of the target. On the expenditure side,*the full-year posture met the target, totaling IDR3,121.9 tn (+0.8% y-y), with a surge in spending activity towards year-end. (Ministry of Finance)
- Indonesia Manufacturing PMI rose to 52.2 in Dec-23 from Nov's 51.7, the fastest expansion rate in 4 months and 28 consecutive months of expansion. New orders rose the most since September as foreign demand increased for the first time in three months. Input cost continue to increased, followed by slightly quicker increase in selling prices. (S&P Global)
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