Today’s Outlook:

MARKET SENTIMENT: Australia RBA December Interest Rate Decision, Germany November CPI, Canada BoC Interest Rate Decision, US Crude Oil Inventories, US 10-Year Note Auction, Switzerland 4Q24 SNB Interest Rate Decision, Europe December Deposit Facility Rate, ECB December Interest Rate Decision, US Initial Jobless Claims, US November PPI, UK October GDP.

ASIA MARKETS: China vowed “more proactive” fiscal measures and “moderately” looser monetary policy next year to boost domestic consumption. The announcement came from an official readout of a key policy meeting that outlined upcoming economic priorities. Elsewhere in the Asia-Pacific, markets were mixed as traders assessed revised economic growth data from Japan and South Korea’s political situation.

CURRENCY & FIXED INCOME: The dollar was up slightly in skittish trading on Monday as investors awaited U.S. inflation data later this week, while the Australian and New Zealand dollars rallied after China pledged an “appropriately loose” monetary policy next year. While markets have priced in a quarter-point interest-rate cut by the U.S. Federal Reserve next week as a near certainty, investors are waiting for U.S. consumer price data on Wednesday. The 10-year U.S. Treasury yield edged higher on Monday ahead of key economic data out later this week. The yield on the 10-year Treasury rose more than 4 basis points to 4.195%, regaining some ground after losing steam last week. The 2-year Treasury yield was also up more than 2 basis points at 4.122%. Yields and prices moved inversely to each other, and one basis point equals 0.01%.

– The dollar rose 0.44% versus South Korea’s won . Over the weekend, South Korean President Yoon Suk Yeol survived an impeachment vote in parliament prompted by his short-lived attempt to impose martial law last week.

– The major event this week is the U.S. consumer price index report, which is due Wednesday and could influence how the Federal Reserve proceeds on interest rates at its Dec. 17-18 meeting. Economists polled by Dow Jones forecast that headline inflation rose 0.3% in November and 2.7% over the prior 12 months.

COMMODITIES: Oil prices climbed more than 1% on Monday as top importer China flagged its first move toward a loosened monetary policy since 2010 aiming to bolster economic growth, state media reported citing a Politburo meeting. Brent crude futures were up USD1.02, or 1.43%, to close at USD72.14 per barrel. U.S. West Texas Intermediate (WTI) crude futures gained USD1.17, or 1.74%, to settle at USD68.37. China’s growth has stalled as a collapse in the property market has hit confidence and consumption. China’s slowdown was a factor behind oil producers group OPEC+ last week deciding to postpone its plans for higher output until April. China will adopt a “moderately loose” monetary policy, according to an official readout from a meeting of top Communist Party officials, a term it last used in 2010 when it looked to support a recovery from the global financial crisis.

– Gold prices hit two-week highs on Monday, climbing more than 1% on renewed buying of the metal by China’s central bank following a sixmonth hiatus, with bullishness increased by anticipation of a U.S. Federal Reserve interest rate cut next week. Spot gold gained 1.2% to USD2,665.39 per ounce. U.S. gold futures added 1.1% to USD2,688.40. The resumption of Chinese buying may support investor demand in the country. In 2023, China was the world’s largest official sector buyer of gold, but the PBOC paused its 18-month buying streak in May.

Domestic Issue
SUN Auction December 10, 2024: Here are 8 Series Details Offered
The government held an auction of rupiah-denominated Government Bonds (SUN) on Tuesday (10/12). Based on the announcement of the Directorate General of Debt Management of the Ministry of Finance, the government set an indicative target of IDR 22 trillion with a maximum target of IDR 33 trillion. There will be eight series of SUN auctioned on December 10, 2024, consisting of SPN (State Treasury Notes) and ON (State Bonds) series. The proceeds will be used to fulfill part of the financing target in the 2024 State Budget. The auction will open on Tuesday (10/12) at 09.00 WIB and close at 11.00 WIB. The auction settlement date is on Thursday, December 12, 2024. The following are the details of SUN to be auctioned on December 10, 2024: SPN12250314 (Reopening), SPN12251211 (New Issuance), FR0104 (Reopening), FR0103 (Reopening), FR0098 (Reopening), FR0097 (Reopening), FR0102 (Reopening) and FR0105 (Reopening). (Data Indonesia)

Corporate News
PTRO: Disclose the Allocation of Funds from the Issuance of IDR 1.5T Notes
PT Petrosea Tbk (PTRO), part of the Barito Group, allocated IDR600 billion of the total IDR1.5 trillion funds obtained through the issuance of Bonds and Sustainable Sukuk Ijarah I Phase I Year 2024. These funds are planned for the purchase of materials and services from non-affiliated parties. PTRO management in a written statement on Monday (9/12) revealed that in addition, IDR405 billion will be used for operations and equipment purchases, IDR375 billion is allocated for labor costs, and IDR120 billion for other operating expenses. The bond and sukuk offering took place on December 9-10, 2024. The bonds and Sukuk Ijarah were issued in four series. Series A bonds offer IDR47 billion with an interest rate of 6.50% per year for a tenor of 367 days, while Series B is worth IDR171.64 billion with an interest rate of 8% per year for three years. Series C reached IDR465.4 billion with 8.75% interest for a five-year period, and Series D amounted to IDR315.96 billion offering 9.50% interest per year for seven years. For Sukuk Ijarah, each series has installments of rewards tailored to the bond tenor, including IDR33 billion for Series A with rewards of IDR2.14 billion per year and IDR128.36 billion for Series B with installments of IDR10.26 billion per year. (Emiten News)

Recommendation

US10YT rebounded back above its resistance of 4.183% after a minor sideways trend preceded by a downward trend following a negative divergence in RSI near the trendline resistance area of 4.469-4.501%. MA10 and MA50 will potentially form a death cross in the coming days. Thus, NHKSI still sees that US10YT yield is projected to reach 4.13-4.116%.

ID10YT formed a bearish opening gap which was immediately closed by reaching back above the potential falling wedge pattern support of 6.895-6.865%. MA10 support of 6.898% was broken down. NHKSI anticipates ID10YT to have a slight rebound to falling wedge pattern resistance at 6.98-7% before an eventual bearish momentum ensues. However, if the current sideways persists, we anticipate the sideways trend could continue until the beginning of 2025.

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