The market participants digested the FOMC Meeting Minutes result, which stated that almost all Federal Reserve officials agreed to set the upcoming interest rate hike to 25 bps and bring the FFR to 4.75% at the next FOMC in March. In addition, they also emphasized that high inflation would remain a key factor that would shape monetary policy, and further rate hikes would be necessary until it was controlled (flattening). Money market participants expect Fed Fund Rate to peak at 5.35% by July and stay around those levels till the end of 2023. The 10-year US Treasury rallied, closing around its highest point of the day.
Meanwhile, from the Europe region, German CPI (Feb.) came in at 8.7% as per market consensus, meaning it is still higher than January at 8.6%, signaling inflation is still hard to beat. This will pave the way for the European Central Bank’s plan to raise interest rates by 50 bps in March; uniting these Western countries in a tight monetary policy. Several macroeconomic data are scheduled to come out today, one of which is from the Eurozone: Inflation (Jan.) and US: 4Q22 GDP, Initial Jobless Claims, and Crude Oil Inventories. As for the energy index has fallen for seven consecutive sessions, triggered by concerns that an economic slowdown will reduce global demand.
S&P 500: Property Bonds Will Be Sluggish This Year Rating agency S&P Global predicts that the property sector of the bond market will be sluggish this year as companies are expected to conduct limited expansion through debt instruments. In its research, S&P said the sector will be more conservative in preparing capital expenditure (CapEx) budgets due to rising construction costs and the effect of the 2024 Elections, which is estimated to increase by five percent. S&P Global mentioned that several property issuers need funds in 2023 and 2024, such as PT Agung Podomoro Land Tbk (APLN), PT Bumi Serpong Damai Tbk (BSDE), and PT Alam Sutera Realty Tbk (ASRI). (Bisnis.com)
S&P Prediction: Indonesian Corporate Bonds in 2023 Is Stable S&P Global assesses that corporate bonds in Indonesia will tend to remain stable in 2023. According to the S&P publication, bonds that will mature from 2023 to 2025, with a value of USD 3 million to USD 3.5 million, mostly consist of large-cap companies and state owned enterprises. In addition, S&P also noted that bonds issued by smaller companies that will mature in 2023 and 2023 had made restructuring, renegotiation, and refinancing last year, which are expected to push maturity to be postponed up to 2026 to bring relief to the market and mitigate the impact caused by uncertainty ahead of the 2024 elections. (Bisnis.com)
US10YT US10YT seems to confirm that it forms a DOUBLE BOTTOM bullish reversal pattern with significant upside potential towards the TARGET yield of 4.48-4.49 (equivalent to the previous pattern target of Falling Wedge). Currently, the Neckline Support test is underway at the level of 3,905. ADVISE: Average Up accordingly after the Support Test proves successful and the yield rises above the previous High level of 3,966 – 4.0 (psychological level). ID10YT ID10YT surged to 6,862 level from the 6,731 level previously, placing the yield above MA50 Resistance, confirming several bullish reversal patterns, and paving the way for strengthening towards TARGET yields: 6.99-7.0 / 7.06 / 7.19-7.20. ADVISE: Average Up accordingly above 6.904.
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