Today’s Outlook:

GLOBAL MARKET: The Chinese government slapped tariffs of up to 15% on U.S. imports of coal and liquefied natural gas and 10% higher duties on crude oil, farm equipment and selected cars, effective Feb. 10. The move comes after the U.S. agreed to pause more aggressive levies on Canada and Mexico. Canadian Prime Minister Justin Trudeau announced in a post on social media site X on Monday evening that President Donald Trump agreed to halt the implementation of tariffs against Canada for at least 30 days. Earlier on Monday, Mexican President Claudia Sheinbaum announced that duties on Mexico imports to the U.S. would also be halted for a month.

MARKET SENTIMENT: There is a flurry of Economic data publications on Wednesday. Starting with the US January ADP NonFarm Employment Change is forecasted to gain from 122K to 148K. However, US’ January S&P Global Services PMI is forecasted to take a slip from 56.8 to 52.8. ISM will also be publishing its January data for Non-Manufacturing PMI (forecast: 54.2) and Prices. US Crude Oil Inventory data will also be released. In Indonesia, GDP Growth for 4Q24 will be released with an anticipation to have a more upbeat result of 4.98% YoY (vs 3Q24’s 4.95%)

FIXED INCOME & CURRENCIES: The U.S. dollar index (DXY) was down 0.95% at 107.96 while the Canadian dollar was weaker and the Mexican peso was stronger. The U.S. dollar edged lower on Tuesday as President Donald Trump’s tariff threats were interpreted more as a negotiating tactic rather than an end goal, a day after he suspended planned measures against Mexico and Canada. However, the new Trump administration imposed additional 10% tariffs on imports from China effective from early Tuesday and currency analysts said they expected high sensitivity to tariff developments and volatility to persist. The yield on the 10-year Treasury slid on Tuesday as traders assessed global trade tensions and awaited more economic data. The benchmark yield was down more than 3 basis points to trade at 4.511%, while the 2-year Treasury yield fell less than 5 basis points at 4.216%. One basis point is equal to 0.01%, and yields and prices move in opposite directions.

ASIAN MARKETS: China slapped tariffs on U.S. imports, in retaliation to the U.S. duties on its exports. China levied tariffs of up to 15% on U.S. imports of coal and liquefied natural gas and 10% higher duties on crude oil, farm equipment and selected cars from the U.S. This move comes just as Trump’s additional 10% tariff across all Chinese imports into the U.S. came into effect at 12:01 a.m. ET on Tuesday. Chinese markets remain closed for the Lunar New Year holiday. 

– The Chinese yuan edged up 0.27% to 7.2796 per dollar in offshore trading. There is no official yuan trading until Wednesday, with mainland markets still closed for Lunar New Year festivities.

COMMODITIES: – OIL prices pared earlier losses on Tuesday after an official said U.S. President Donald Trump plans to restore his “maximum pressure” campaign on Iran in a bid to drive down Iranian oil exports to zero, which offset some weakness from tariff drama between Washington and Beijing. The U.S. official told Reuters that Trump’s directive orders the U.S. Treasury secretary to impose “maximum economic pressure” on Iran, including sanctions and enforcement mechanisms on those violating existing sanctions. U.S. West Texas Intermediate (WTI) crude fell 46 cents, or 0.63%, to close at $72.70. It fell more than 3% to its lowest since late December during the session, amid trade war fears between the U.S. and China. Global benchmark Brent crude futures rose 24 cents, or 0.32%, to close at $76.20. GOLD prices regained an all-time high on Tuesday, driven by investors seeking the safe-haven asset after China retaliated with tariffs on the U.S. in response to President Donald Trump’s tariffs. Spot gold gained 1.1% to $2,843.06 per ounce after hitting a record high of $2,845.14 earlier in the session. U.S. gold futures rose 0.6% to $2,873.7.

Domestic News
Minister Ara Mentions Pandu Sjahrir as ‘Boss’ of Danantara, a Sign of Becoming Managing Agency?
Minister of Housing and Settlement Areas (PKP) Maruarar Sirait referred to Pandu Sjahrir, Deputy President Director of PT TBS Energi Utama Tbk (TOBA), as the ‘Boss’ of the Danantara Investment Management Agency. Maruarar or familiarly called Ara, through uploads on his Instagram account, shared several moments with Luhut Binsar Pandjaitan’s nephew. One of them is a photo showing the two shaking hands. Based on the caption of the photo uploaded on Monday (3/2/2025), Ara referred to Pandu Sjahrir as ‘Boss’ Danantara. “Discussion with Mr. Pandu, the boss of Danantara, on housing financing. Hopefully it will be beneficial for the Indonesian people as directed by President Prabowo,” wrote the @maruararsirait account upload quoted on Tuesday (4/2/2025). Rumors of Pandu Sjahrir entering the ranks of Danantara officials have been rolling for a long time. One of them was when Pandu was seen several times walking with Danantara BPI Head Muliaman Hadad, especially when he met Prabowo at the Palace. Meanwhile, in a previous development, a Bisnis source said Pandu would become Danantara’s Chief Operating Officer. “Pandu Sjahrir will join the board,” said one of the sources in November 2024. (Bisnis)

Corporate News
ISAT: Fitch Ratings Upgrades Indosat’s Rating, Here Are the Driving Factors
Fitch Ratings raised PT Indosat Tbk’s (ISAT) rating from BBB- to BBB with a stable outlook in line with the prospect of increasing profitability and average revenue per user (ARPU). Fitch Ratings analysts Mengjia Lu and Wenny Anthony said the ratings were assigned to Indosat’s long-term foreign and local currency Issuer Default Ratings (IDR) and foreign currency senior unsecured ratings. At the same time, Fitch Ratings Indonesia raised Indosat’s long-term national rating to AAA(idn) from AA+(idn) with a stable outlook. Furthermore, the AAA national rating represents the highest rating assigned by Fitch. A triple A rating is given to issuers or bonds with the lowest expectation of default risk compared to all other issuers or bonds in the same country or monetary union. “The increase in IDR ratings and long-term national ratings reflects our expectation that the company’s increasing profitability, low leverage, and increasing ARPU will keep EBITDA net leverage below 1.3 times,” he explained in an official statement, quoted Tuesday (4/2/2025). Fitch Ratings said Indosat’s EBITDA net leverage was at a low level of 0.5 times in the third quarter of 2024 and will remain so until the end of 2024. Furthermore, ISAT’s EBITDA net leverage is expected to increase to around 1.0 times in 2025- 2026. (Bisnis)

Recommendation

US10Y terkoreksi dan menguji kembali support channel pattern uptrend tipis di 4,50-4,54% minggu lalu. Ini membentuk dragonfly doji setelah jeda tarif Trump untuk Meksiko dan Kanada, tetapi tidak ada jeda untuk tarif China. NHKSI Research memperkirakan imbal hasil akan rebound seiring dengan meningkatnya sentimen bullish dalam jangka menengah-panjang meskipun ada gejolak besar.

ID10Y telah terkoreksi kembali setelah naik dari 6,964%, tetapi support 7,022% masih bertahan. NHKSI Research melihat adanya swing naik pada imbal hasil dengan resisten terdekat di 7,100%.

Download full report HERE.