Today’s Outlook:
US MARKETS: US economic data showed moderate inflation. A US Commerce Department report showed the Personal Consumption Expenditure index – the Federal Reserve’s favorite gauge of inflation – actually remained unchanged at 2.6% yoy in December. But the Core PCE price index which excludes volatile items such as food and fuel, did slow to 2.9% in December, from 3.2% in the previous month, below economists’ estimate of 3%. This kept the annual inflation rise below 3% for the third consecutive month and supports hopes of an interest rate cut this year. Earlier on Thursday, data showed strong fourth quarter US economic growth figures (US GDP 4Q23). On the other hand, Personal Spending (Dec) aka consumer spending, which is the largest part of economic growth, surprisingly rose 0.7%, well above the estimated 0.4% increase, which supports optimism that the US economy is far from recession.
COMMODITIES: OIL prices jumped 1% on Monday amid fuel supply concerns after a missile hit a fuel tanker belonging to Trafigura in the Red Sea; plus Russian refined product exports will fall as some refineries are under repair after a Ukrainian drone attack. Brent crude oil futures rose to USD 84.38/barrel, while US West Texas Intermediate crude oil advanced to USD 78.79/barrel. Both contracts gained two weeks in a row and settled at two-month highs in Friday’s trading, supported by supply concerns due to Middle East and Russian conflicts; while positive US economic growth and signs of Chinese stimulus are expected to boost global demand expectations. Russia is likely to reduce exports of naphtha, a petrochemical feedstock, by around 127,500-136,000 barrels per day, or about a third of its total exports, after fires disrupted refinery operations in the Baltic and Black Seas, according to traders and LSEG vessels. On February 1, key ministers from OPEC+ will meet online. OPEC+ is likely to decide its oil production levels for April and onwards in the coming weeks.
Corporate News
Tower Bersama (TBIG) Ready to Repay Bonds Maturing IDR 1.01 Trillion Tower issuer PT Tower Bersama Infrastructure Tbk (TBIG) said that it has prepared funds to pay off bonds worth a total of IDR 1.01 trillion which will mature in February 2024. TBIG Director Helmy Yusman Santoso said that his party is ready to pay off the Tower Bersama Infrastructure IV Sustainable Bonds phase III of 2021 series B amounting to IDR 1.01 trillion, which will mature on February 17, 2024. For information, TBIG has two bonds that will mature in the near future. TBIG’s bonds that will mature are the Tower Bersama Infrastructure IV Sustainable Bonds phase III of 2021 series B amounting to IDR 1.01 trillion, which will mature on February 17, 2024. TBIG’s next bond to mature is the Tower Bersama Infrastructure Sustainable Bond V phase VI in 2023 with a value of IDR 2.48 trillion and will mature on February 27, 2024. (Bisnis)
Domestic Issue
Government to Hold Government Bond (SUN) Auction on Tuesday (30/1) The government will hold an auction of rupiah-denominated Government Securities (SUN) on Tuesday (30/1). In this SUN auction, the government set an indicative target of IDR 24 trillion – IDR 36 trillion. Based on information from the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance, there are eight series of SUN that will be auctioned starting at 09.00 WIB until 11.00 WIB. The auction aims to fulfill part of the financing target in the 2024 State Budget. The following are details of the 8 SUN series that will be offered at the auction on Tuesday (30/1) tomorrow: SPN03240501, SPN12250116, FR0101, FRSDG001, FR0100, FR0098, FR0097 and FR0102. In this auction, the FRSDG001 Series is again offered, which is the first Sustainable Development Goals (SDGs) Bond series offered through auction in the domestic primary market. (Kontan)
Recommendation
US10YT is running quite orderly moving up in a PARALLEL CHANNEL pattern, towards TARGET: 4.258% / 4.35%. ADVISE: AVERAGE UP above the Resistance from the previous High level of 4.2%.
ID10YT is trying to break out MA10 & MA20, thus it can smooth its way towards TARGET: 6.75% / 6.948% – 6.962%. ADVISE: AVERAGE UP accordingly.
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