Today’s Outlook:
US MARKET: Prior to Thursday’s Personal Consumption Expenditures (PCE) price index data, market participants are also looking forward to the 4th quarter US GDP released on Wednesday, which is expected to come out at 3.3% qoq, lower than 4.9% in the previous quarter; indicating that although the US economy seems to be more resilient than some other developed economies, the economic slowdown is evident. The above data will provide a new factor of consideration for investors who seem to have re-evaluated the chances of a rate cut due to the release of strong Inflation and employment data. In other investment instruments, US Treasury yields rose after the auction session, while the Dollar fell against a number of other major world currencies including the Euro although the Dollar strengthened slightly against the Japanese Yen.
ECONOMIC DATA: Yesterday’s new home sales to young families in the US rose lower than expected in January, amid a slumping trend in the US South. Today investors look forward to Durable Goods Orders and CB Consumer Confidence data for Feb. Market participants are also monitoring the risk of a US government shutdown if Parliament does not approve a debt extension on Friday.
COMMODITIES: OIL prices rallied on Monday as diesel demand from Europe was hampered by sanctions on Russia and disruptions to sea shipping lanes, pushing prices higher at a time when US refinery production is also in danger of being sub-optimal due to scheduled maintenance/overhaul. US WTI rose 1.43% to USD 77.58/barrel, while Brent added 1.1% at USD 82.54/barrel. In other commodities, the spot price of GOLD fell 0.2% to USD 2031.55/ounce, while copper depreciated 1.38% to USD 8449/ounce.
ASIA & EUROPEAN MARKETS: Japan just released national Inflation figures (Jan) at 2.2% yoy, versus 2.6% in the previous month. Meanwhile, National Core CPI came in at 2.0% yoy, slightly higher than the forecast of 1.9%, although slipping from Dec month at 2.3%. Further this afternoon from Continental Europe, Germany will explain its outlook on the consumer climate in March which is likely to remain sluggish.
Corporate News
Merdeka Battery (MBMA) Plans IDR 1.5 Trillion Bonds to Pay Debt PT Merdeka Battery Materials Tbk (MBMA) said that it will issue bonds with a maximum principal amount of IDR 1.5 trillion. These bonds will be used partly for debt repayment. In its prospectus, MBMA said that it will conduct a public offering of Merdeka Battery Materials I bonds in 2024 with a maximum principal amount of IDR 1.5 trillion. These bonds are planned to be issued scripless and offered at 100% in two series. Series A with a tenor of 367 calendar days from the issuance date and Series B with a tenor of three years from the issuance date. MBMA has not yet determined the principal amount and interest rate of each series of bonds. All proceeds from the bond offering, after deducting issuance costs, amounting to USD 80 million or around IDR 1.26 trillion will be used for early payment of USD 80 million principal amount of debt to PT Bank UOB Indonesia. (Bisnis)
Domestic Issue
Government Holds SUN Auction Today, Indicative Target Reaches IDR 36 Trillion The government will hold an auction of rupiah-denominated Government Bonds (SUN) on Tuesday (27/2). At the SUN auction this time, the government set an indicative target of IDR 24 trillion – IDR 36 trillion. Based on information from the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance, there are seven (7) SUN series that will be auctioned starting at 09.00 WIB until 11.00 WIB. The auction aims to fulfill part of the financing target in the 2024 State Budget. The following are details of the 7 SUN series that will be offered at the auction on Tuesday (27/2): SPN12240529 (Reopening) will mature on May 29, 2024 with a discount rate 2. SPN12250213 (Reopening) will mature on February 13, 2025 with a discount rate 3. FR0101 will mature on April 15, 2029 with a coupon rate of 6.87% 4. FR0100 will mature on February 15, 2034 with a coupon rate of 6.62% 5. FR0098 will mature on June 15, 2038 with a coupon rate of 7.12% 6. FR0097 will mature on June 15, 2043 with a coupon rate of 7.12% 7. FR0102 will mature on July 15, 2054 with a coupon rate of 6.87%. (Kontan)
Recommendation
US10YT still needs more motivation to solidify its position above MA10 Resistance / yield 4.288%. ADVISE : AVERAGE UP accordingly. Nearest TARGET: 4.355% before heading to yield of 4.50% – 4.60%.
ID10YT has an attempt to break the third moving average resistance and the upper channel of the downtrend that blocked its upward move at a yield of 6.611% which has now changed its role to the nearest support. ID10YT has the potential to continue strengthening towards the TARGET yield of 6.75% – 6.777%. ADVISE: AVERAGE UP accordingly.
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