The market participants digested the macro data that continued to show the strength of the US economy, validating the Federal Reserve’s tight monetary policy stance. Initial Jobless Claims fell to an unexpected 192K from 200K (lower than the previous period’s 195K), indicating the labor market is still tight. The US 4Q22 GDP report confirmed the economy grew solidly at 2.7%, albeit lower than the 2.9% forecast and from the previous quarter’s 3.2%. The 4Q22 Personal Consumption Expenditures (PCE) reading, the Fed’s preferred inflation measure, was revised upward to 3.7%; indicating inflation was much stronger than initially expected. From Europe, the Eurozone CPI (Jan.) reading did not budge at 8.6% YoY as expected, a downward from December’s 9.2%; on the other hand, Core Inflation showed an increase to 5.3% (vs. previous 5.2%). Meanwhile, from Asia, the Bank of Korea kept interest rates at 3.5% in its February meeting.

The 10-year US Treasury yield pulled back from three-month highs in a volatile trading session as investors priced in the resilient economic data above. The benchmark yield were down at 3.8865%, while the yield curve between two- and 10-year Treasury notes was still inverted at minus 77.90 points, indicating a looming recession.

Corporate News
Foreign Ownership in SBN Continues to Decrease Finance Minister Sri Mulyani Indrawati said that in early 2023, the performance of the economy and financial markets had improved and encouraged foreign capital inflows of IDR43.9 trillion in the Indonesian bond market. The Indonesian bond market also received this capital inflow of IDR 43.9 trillion YTD despite recent outflows. It was recorded that the outflow of Government Securities (SBN) in 2023 amounted to IDR6.7 trillion. Meanwhile, in terms of SBN ownership, dominated by both banks and Bank Indonesia. On the other hand, foreign ownership has continued to experience a downward trend since the end of 2020, which was at 25.2%. As of February 20, 2023, it was recorded at 14.2%. (Bisnis)

Domestic Issue
Public Offering of Provident Investasi Bersama Tbk Bonds PT Provident Investasi Bersama Tbk (PALM) will conduct a public offering of USD50 million bonds, which are divided into two series. Based on the prospectus issued yesterday, this investment company will issue series A bonds with a maturity of 370 calendar days and series B bonds with a maturity of three years from the issuance date. The use of 81% of the proceeds from the public offering will be used to pay debts and interest expenses incurred under the USD50 million facility agreement between the company and UOB Bank, then 18% of the proceeds from the public offering will be used to develop an investment portfolio in the form of purchasing shares in one or more companies from the natural resources, technology, media, and telecommunications sectors. (Katadata)

US10YT US10YT is firmly in the uptrend of its yield, but it is likely to test the MA10 Support at 3.844. If this Support does not hold back then it is likely that the US10YT yield will look for other Support within the MA20 / 3,721. ADVISE: Hold, monitor Support to prepare reducing position. ID10YT ID10YT is still showing yield strengthening even though it is around the resistance area of 6,812-6,83; a breakout of which will bring yield to a further strengthening towards 6,987-7.0 (psychological level). ADVISE: Average Up accordingly.

Download full report HERE.