Today’s Outlook:
US MARKET: The market took a leg lower after the most recent consumer confidence survey from the Conference Board came in much weaker than economists’ estimates. This follows a series of disappointing data releases last week, including lackluster manufacturing and retail sales numbers. Cautious forward guidance from Walmart added to worsening sentiment on consumer health and the economy.
MARKET SENTIMENT : US Crude Oil Inventory numbers will be released. New Home Sales in January is forecasted to decline 677k from 698k in December.
FIXED INCOME AND CURRENCY : The 10-year Treasury yield fell to its lowest level since December as more signs emerged that the economy may be slowing, leading traders to bid up fixed income prices. Benchmark 10-year Treasury yields moved down nearly 10 basis points to 4.294%, and the 2-year Treasury yield slipped more than 6 basis points to 4.098%. One basis point equals 0.01%, and yields and prices move inversely, meaning yields fall when prices rise. The Conference Board’s latest consumer confidence survey came in at 98.3 in February, short of economists’ consensus estimate of 103.0 and down from 105.3 last month. The Philadelphia Federal Reserve said its services index tumbled to -12.9 in February, the lowest since April 2023, from 2.2 in January, while its sales/revenue index fell 15 points to -12.7, its lowest since May 2020. The U.S. dollar index, which tracks the greenback against a basket of its currency peers, had inched down by 0.1% to 106.45. The U.S. dollar edged down on Tuesday, as investors gauged fresh concerns over international trade tensions and the prospects for American economic activity.
ASIAN MARKET: Investors also assessed the rate decision by the Bank of Korea. South Korea’s central bank expectedly cut rates to 2.75% from 3%, as it strives to stimulate a slowing economy. The Korean won marginally weakened to 1,430.1 against the dollar. South Korea has been facing political uncertainty, stemming from the impeachment proceedings against President Yoon Suk Yeol after his short-lived imposition of martial law in December.
COMMODITIES : OIL US Crude oil futures climbed slightly from post-settlement lows Tuesday after the American Petroleum Institute reported an unexpected decline in weekly domestic crude stockpiles. Crude Oil WTI Futures, the U.S. benchmark, recently traded at $73.17 a barrel following the report after settling down 2.5% at $68.93 a barrel. U.S. crude inventories declined by 640,000 barrels for the week ended Feb. 21, compared with a build of 3.3M barrels reported by the API for the previous week. Economists were expecting a build of 2.3M barrels. Gasoline stockpiles increased by about 537,000 barrels, while distillate inventories — the class of fuels that includes diesel and heating oil — fell by 1.1M barrels. Gold prices fell Tuesday amid profit taking, though downside momentum was kept in check by concerns over higher U.S. trade tariffs and worsening relations between Washington and Beijing. GOLD had risen in overnight trade, coming within spitting distance of a record high amid persistent safe haven demand. This trend was furthered by U.S. President Donald Trump signaling that he still planned to impose 25% tariffs on Canada and Mexico by next week. This came after Trump over the weekend signed a sweeping executive order aimed at leveling more trade and investment restrictions against China, which could point to further worsening in relations. GOLD fell 1.4% to $2,912.93 an ounce, while gold futures expiring in April fell 1.3% to $2,924.71 an ounce. Spot prices hit a record high of $2,956.37 an ounce last week.
INDONESIA: As USD/IDR is set to be hovering around IDR 16,400-16,200 for the medium term, we view this to be a stable footing for Indonesia’s currency currently.
Domestic News
Indonesia, Apple agree on terms to lift iPhone 16 ban, Bloomberg News reports
Indonesia and Apple have agreed on terms to lift the country’s ban on iPhone 16s and could sign a deal as early as this week, Bloomberg News
reported on Tuesday, citing people familiar with the matter. Indonesia banned the iPhone 16 in October after Apple failed to meet requirements
that smartphones sold domestically should comprise at least 35% locally-made parts. Since then, Indonesia’s investment minister has said Apple
plans to invest $1 billion in a manufacturing plant that produces components for smartphones and other products. Besides this investment, Apple
will commit to training locals in research and development on its products and this will be done through programs other than existing Apple
academies, the report said. However, Apple has no immediate plans to start making iPhones in the country, the report said. Apple and Indonesia’s
Ministry for Industry, which was tasked with enforcing the ban, did not immediately respond to Reuters’ requests for comment. They did not
respond to Bloomberg either. (Reuters)
Corporate News
WOOD: Prepare Funds, Integra Indocabinet will Pay Bonds and Sukuk
PT Integra Indocabinet Tbk. (WOOD) is preparing funds for the payment of Sustainable Bonds and Sukuk I Phase II 2022 series A. Both will mature on March 25 2025. Sustainable Bonds I Phase II 2022 series A have a nominal value of IDR 197.4 billion with 9% interest. Meanwhile, the Sukuk have a nominal value of IDR 83.8 billion with floating interest with an issuance date on March 25 2022. In his statement quoted on Monday (24/2/20, WOOD Director, Wang Sutrisno said that the Company has prepared funds to pay off the principal and interest on the Bonds and Sukuk which will mature on March 25 2025. Previously, PT Integra Indocabinet Tbk (WOOD) collaborated with PT Ciputra Development Tbk (CTRA) is developing a housing project with an eco-sustainable concept in Lingkar Timur Wedoro Klurak, Sidoarjo, East Java. This project is being carried out through CTRA’s subsidiary, PT Ciputra Cipta Cemerlang (CCC), which officially collaborates with WOOD through the signing of an agreement on December 6 2024. (Emiten News)
Recommendation
US10YT continued its correction by 2.32% to downtrend channel support 4.298% . America’s benchmark bond yield reverted from its previous uptrend into a downtrend as DOGE makes more significant cuts to US Government bureaucracy, making waves of confidence from investors.Wait for developments from the US market regarding Trump’s Tariff policy to determine where the yield will move.
ID10YT rose 1.21% to 6.864%. It has broken above the downtrend channel resistance at 6.830-6.822%. The next test for resistance is 6.898%. It seems that Sideways’ position this time is more or less oriented towards tariff policy & the US central bank, therefore the same Wait & See position also applies until there are further developments.
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