Global Market Update
- On June 6th, 2024, the yield on the US 10-year Government Bond closed at a level of 4.2870%, marking a small increase of 1.15 bps from the previous day.
- In June, the European Central Bank (ECB) lowered its main interest rates by 0.25%, as expected. This decision followed nine months of unchanged rates. It came after inflation dropped by over 2.5% since September 2023. The main refinancing rate dropped to 4.25%, the deposit rate to 3.75%, and the lending rate to 4.5%.
- In April 2024, the US trade deficit hit $74.6 billion, the highest since October 2022, and 8.75% higher than March 2024. Imports rose by 8.7%, led by items like cars, computers, telecom gear, and oil, while transport imports fell. Exports only grew by 0.8%, mainly in pharmaceuticals, electric devices, and semiconductors, but dropped in industrial supplies, travel, and financial services. The biggest gap was with the EU, up 11%, while the deficit with China shrank by 11%.
Sources: Bloomberg, European Central Bank, Bureau of Economic Analysis, Trading Economics and Binaartha.
Domestic Market Update
- On June 7th, 2024, the yield curve for the 10-year Indonesia Government Bond remained stable, closing at a level of 6.9304%.
- Indonesia’s foreign exchange reserves totaled $139.0 billion by the end of May 2024, reflecting a 2.06% MoM increase. This uptick in reserves was fueled by tax and service receipts, as well as the issuance of global government bonds.
- As of June 7th, 2024, the rupiah’s Jakarta Interbank Spot Dollar Rate (JISDOR) remained close to the level of 16,000s, standing at 16,218, only appreciating by 37-bps compared to yesterday.
Sources: Bank Indonesia, PHEI, and Binaartha.Market Projection
We predict the 10-year Indonesia Government Yield Curve will continue to move within range 6.4964% – 7.1803% for next Monday. Recommendations: FR0102, FR0089, FR0062, FR093, and FR0088.