Today’s Outlook:
US markets close for the Thanksgiving holiday. Central banks across Asia-Pacific still expect the FOMC to cut interest rates by 25 basis points at its December meeting. The preliminary GERMAN CPI estimate came in 0.1% lower than expected, coming in at 2.2% yoy for Nov, compared to 2.0% in Oct. This afternoon it’s the EUROZONE’s turn to face their Inflation figures (Nov) which are expected to again accelerate above the ECB Target of 2%. A number of other economic indicators from GERMANY, such as Retail Sales (Oct) and Unemployment Rate (Nov) will also give color to the market dynamics.
ASIA MARKETS: In a surprise move, SOUTH KOREA’s central bank cut its benchmark interest rate for the second consecutive meeting on Thursday after inflation slowed more than policymakers expected. The Korean WON weakened after the decision.
– JAPAN released Tokyo Core CPI figures this morning, which apparently heated up above the 2.0% forecast, coming in at 2.2% yoy in Nov; possibly supported by Industrial Production which started picking-up 3.0% mom in Oct, from 1.6% the previous month.
CURRENCY & FIXED INCOME: The DOLLAR INDEX, which measures the strength of the US currency against 6 of its rivals, rose 0.1% to 106.2 after falling 0.7% in the previous session. Market analysts expect Wednesday’s fall in the dollar to likely be driven by investors cashing in profits from US stocks and bonds before the month of November ends.
– The Japanese YEN was 0.28% weaker at 151.52/USD after rallying to a 1-month high in the previous session. The Asian currency headed for its strongest week since early September on rising expectations of a rate hike from the BANK OF JAPAN next month.
– EURO was down 0.13% at USD 1.0552 after rising 0.7% in the previous session following EUROPEAN CENTRAL BANK (ECB) board member Isabel Schnabel’s statement that rate cuts should be gradual and move into neutral territory.
– EUROPEAN BOND YIELD fell as prices rose, a bit of relief for the French government, which saw its borrowing costs rise to the highest level over Germany’s since 2012 on Wednesday.
COMMODITIES: OIL prices rose after ISRAEL said the ceasefire with HIZBULLAH had been violated when they suspected several vehicles were sneaking in from the south; automatically pushing BRENT crude oil up 0.37% to USD 73.1/barrel. OPEC+ is suspected to postpone the meeting originally scheduled for Sunday, to December 5, with the agenda of cutting oil production. The group will discuss whether to go ahead with plans to increase production by 180,000 barrels per day starting in January. Reports indicate that discussions are underway to delay the planned increase, possibly for the next few months.
– On the other hand, spot GOLD prices rallied 0.14% to USD 2,639/ounce, on a downward trajectory of nearly 4% during November, its weakest monthly performance in over a year.
Domestic Issue
Prepare Sukuk Auction on December 3, 2024, Government Targets IDR 9 Trillion
The government will hold another auction of State Sharia Securities (SBSN) on Tuesday, December 3, 2024 in order to meet part of the financing target in the 2024 State Budget. A press release from the Directorate of Sharia Financing of the Ministry of Finance stated that the SBSN to be auctioned are the SPN-S series (State Treasury Bills – Sharia) and PBS (Project Based Sukuk). There are 7 series that will be auctioned on December 3 with a settlement date of December 5, 2024 2024. The seven sukuk series are as follows: SPNS09062025 (reopening), due date June 9, 2025, SPNS01092025 (new issuance), due date September 1, 2025, PBS032 (reopening) due date July 15, 2026, PBS030 (reopening) due date July 15, 2028, PBS034 (reopening) due date June 15, 2039, PBS039 (reopening) due date July 15, 2041, and PBS038 (reopening) due date December 15, 2049. The Non-competitive Purchase Allocation for the SPNS series is a maximum of 99% of the amount won. While the other series is 30% of the amount won. Of the seven sukuk series auctioned, the Ministry of Finance has set an indicative target of IDR 9 trillion. (Emiten News)
Corporate News
HRTA: Hartadinata (HRTA) Ready to Pay IDR 616.5 Billion Bonds
PT Hartadinata Abadi Tbk (HRTA) is ready to pay interest and principal on bonds amounting to IDR 616.5 billion. The Hartadinata Abadi Sustainable Bonds I Phase I 2019 will mature on December 19, 2024. In details, the principal of Hartadinata Abadi Sustainable Bonds I Phase I 2019 which will be repaid is IDR 600 billion. Then the 20th Gross Interest on Hartadinata Abadi Sustainable Bonds I Phase I 2019 amounted to IDR 16.5 billion. In the disclosure of IDX information, Thursday (11/28/2024), payments will be made through the payment agent PT Kustodian Sentral Efek Indonesia (KSEI) according to a predetermined schedule. (IDX Channel)
Recommendation
US10YT tends not to move much ahead of the US Thanksgiving holiday, in overall it is still in a downtrend towards a yield of 4.13% – 4.116%. MA10 & MA20 will soon deadcross, further confirming this downtrend, and making the yield level of 4.36% as the nearest Resistance.
ID10YT is pretty much still above the first Support MA10 / yield of 6.90%, although a trend reversal candle like Shooting Star has appeared when approaching the Resistance area of 6.96% up to 7.0% psychological level. Only when the yield closes below the Support will it move down towards 6.843% – 6.81% and investors can witness the bond price strengthening higher.
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