Today’s Outlook:
US MARKET: Fed Fund Rate futures showed a 52.6% chance of a cut in June, with a 35.5% probability of no cut; a sharp reversal from bets on February 1 with a 62% chance of a cut in March, according to CME Group’s FedWatch Tool. Meanwhile, the two-year US Treasury yield, which reflects interest rate expectations, fell 2.2 basis points to 4.692%, while the 10-year bond yield fell 7.5 basis points to 4.252%. The 10-year bond hit a three-month high of 4.3540% overnight.
EUROPEAN MARKETS: German business sentiment also fell unexpectedly in Europe’s largest economy in December, as indicated by the German Ifo Business Climate Index. German bond yields are on track for a third consecutive weekly gain as economic data and central bank officials continue to dampen investor hopes for a rapid rate cut by the European Central Bank this year.
ASIAN MARKETS: Data showed on Friday that new home prices in China fell for a seventh month in January, leaving sentiment fragile as policymakers’ efforts to restore confidence in the debt-ridden property sector struggle to gain traction.
The Dollar Index is poised to record a weekly decline for the first time in 2024 as investors consolidate positions and seek further guidance on the global economy. The dollar index rose 0.029%, with the euro down 0.03% to USD 1.082. COMMODITIES: US crude oil futures fell USD 2.12 to USD 76.49 per barrel and Brent fell USD 2.05 to USD 81.62. GOLD prices are set for a weekly gain, supported by a weaker dollar. US gold futures closed 0.9% higher at USD 2,049.40 an ounce.
Corporate News
Waskita Karya (WSKT): All Bank Creditors Agree to Restructure PT Waskita Karya (Persero) Tbk (WSKT) reported that all bank creditors have agreed in principle to the company’s proposed bank debt restructuring scheme. In addition, the General Meeting of Bondholders (RUPO) of state-owned construction company PT Waskita Karya (Persero) Tbk (WSKT) gave its blessing for the restructuring of the non-guaranteed bond principal and interest settlement scheme. President Director of Waskita Karya Hanugroho stated that the approval of the restructuring was an important achievement for the recovery of Waskita’s financial condition to be able to carry out optimal cash flow management, in order to produce a more sustainable operational activity cycle. In line with the approval from bondholders, all bank creditors have also approved in principle the proposed bank debt restructuring scheme proposed by Waskita. Waskita held a meeting on February 21-22, 2024 in Jakarta. As a result, the approved RUPO was the 2018 Shelf-Registered Bonds III Phase III with an approval percentage of 77.91%, while the Shelf-Registered Bonds IV phase I in 2020 reached 92.38%. Meanwhile, the Shelf-Registered Bonds III Phase II of 2018 received 79.19% approval. As is known, the minimum approval result is 75% of the quorum present at the meeting. (Bisnis)
Domestic Issue
IDR 23.9 Trillion Sold, MoF: ORI025 Sales Affected by Election The Directorate General of Financing and Risk Management of the Ministry of Finance (DJPPR Kemenkeu) said that the realization of sales of Retail State Bonds (ORI) ORI025 series reached IDR 23.9 trillion until the end of the offering period Thursday (22/2/2024). On the other hand, the sale of ORI025 was affected by the 2024 General Election. Director of Government Securities of the Ministry of Finance, Deni Ridwan, said that until now his party is still reconciling ORI025 sales data with related parties. “ORI025 orders have reached IDR 23.9 trillion, with a 3-year tenor of IDR 19.38 trillion and a 6-year tenor of IDR 4.53 trillion. The final figure will be announced after the determination of the ORI025 issuance on February 26, 2024,” Deni told Bisnis, quoted on Friday (23/2/2024). Furthermore, he said, the ORI025 sales achievement had exceeded the previous series, ORI024, which sold IDR 14.5 trillion in 2023. However, ORI025 sales are still below the initial quota set at IDR 25 trillion. The reason is that people wait and see regarding the 2024 elections. “At the beginning of the offering period until the implementation of the Presidential and legislative elections, ORI025 bookings were relatively slow because people seemed to tend to wait and see over the country’s political dynamics,” he said. (Bisnis
Recommendation
US10YT is testing MA20 Support at 4.208% after starting to weaken below MA10, making 4.278% the closest Resistance at the moment. Consolidation is expected to continue, at least being Sideways while waiting for US PCE price index, or even breaking further to the following Support around 4.10%. ADVISE: reduce position, WAIT & SEE.
ID10YT is also finally sinking below all three Moving Averages (making the level of 6.608% as the nearest Resistance at the moment), most likely consolidation will approach the Support of the previous Low level around 6.516% yield. ADVISE: WAIT & SEE for possible Buy on Weakness.
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