Global Market Update
- On August 20th, 2024, the yield on US 10-year Government Bonds decreased by 6.44 basis points to a level of 3.8067%.
- Japan’s trade deficit widened to JPY 621.84 billion in July 2024, up from JPY 61.33 billion a year earlier, missing market expectations. Imports surged 16.6% to a 19-month high, outpacing the 10.3% rise in exports, which marked the eighth consecutive month of growth.
- UK public sector net borrowing rose to £3.1 billion in July 2024, up from £1.3 billion a year earlier, and surpassing forecasts. Spending increased by £3.8 billion to £102.6 billion, driven by higher government spending on services and benefits, though partially offset by lower debt interest payments.
Sources: Ministry of Finance-Japan, Office for National Statistics – UK, Bloomberg, and Trading Economics.
Domestic Market Update
- On August 21st, 2024, the yield on 10-year Indonesian government bonds fell by 3.14 bps to 6.6987%, with the ICBI hitting a new ATH of 390.5619.
- On August 20-21, 2024, Bank Indonesia kept its BI Rate at 6.25%, Deposit Facility at 5.50%, and Lending Facility at 7.00% to stabilize the Rupiah and maintain inflation within the 2.5±1% target for 2024 and 2025.
- Fitch Ratings expects slower short-term growth in Indonesia’s debt market due to steady fiscal policy. Indonesia will remain a top US dollar and sukuk issuer, with the DCM likely exceeding USD 750 billion. Sukuk will form a third of early 2024 issuance, and 98% of Indonesian US dollar sukuk are investment-grade. Government debt is projected to fall to 37.2% of GDP by 2027, despite ongoing fiscal risks.
Sources: Bank Indonesia, Fitch Ratings, Bloomberg and, PHEI.
Market Projection
We predict the 10-year Indonesia Government Yield Curve will continue to move within range 6.6427% – 6.7769% for tomorrow. Recommendations: FR0100, FR0081, FR0101, FR0087, FR0102, PBS038, PBS033, PBS005, ORI025T6, and ORI023T6.