Positive sentiment was evenly spread across regional markets, with US stocks registering yearto-date highs (mainly thanks to the help of Tech sector giants); fueled by bets the Federal Reserve will finally put the brakes on interest rate hikes. The MSCI world stock index recorded a 13-month high, gaining a weekly gain of 0.6%. As reported by Refinitiv, the S&P500 has now posted a 20% gain since its 12 October low, confirming this is a bull market. Market participants are now pricing in a 73% chance that the Fed will hold rates at 5-5.25% in its FOMC Meeting decision on June 15th in the morning; yet opening a 50% chance of a hike in July. These rumors over the future of US interest rates also drove up their sovereign bond yields. The 2-year US Treasury, which is the most sensitive to monetary policy expectations, rose to a yield of 4.602%; while the 10-year benchmark rallied to a yield of 3.743%.
The US Dollar index, which measures the strength of the US currency versus 6 other major world currencies, rebounded 0.21% to 103.47. This morning, Japan has reported its producer-level inflation (May PPI) which turned out to fall below expectations. Indonesia will monitor the Consumer Confidence (May) data, versus April’s reading of 126.1. Later tonight it will be interesting to watch US Consumer Inflation Expectations, versus the previous reading of 4.4%.
Ahead of Maturity, PTPP Prepares IDR 460 Billion for Bond Repayment PT Pembangunan Perumahan Tbk (PTPP) emphasized that it has prepared funds for the repayment of bonds that will mature. PTPP Director of Finance and Risk Management Agus Purbianto said the funds that have been prepared have reached IDR 460 billion. The bonds that will mature on July 5, 2023 are PTPP Phase I 2018 Sustainable Bonds II Series B. (Emiten News)
Corporate Bond Coupons Recorded to Rise in 2023, Consider the Driving Factors The increase in benchmark interest rates that continued in 2023 also raised the interest rate of corporate bonds. This is indicated by the increase in coupons paid by companies issuing bonds. PT Pemeringkat Efek Indonesia (Pefindo) noted that the increase in coupons for 3-year corporate bonds issued during January-April 2023 ranged from 60 bps to 80 bps. Meanwhile, the increase in bond coupons with a 1-year tenor can be above 100 bps. Pefindo Chief Economist Suhindarto said, the higher increase in the 1-year tenor occurred due to the high new supply. (Kontan)
US10YT looks steady above MA10 & MA20 Support, making the yield range of 3.706-3.75% the closest Support at the moment. US10YT still has a chance to rise further towards TARGET yield: 3.843% / 3.97%. ADVISE: Average Up accordingly. ID10YT is attempting to break the MA10 & MA20 resistance up to yield 6.409%. ADVISE : If this downtrend channel pattern is able to be broken, it opens up the potential to rise towards TARGET: 6.540% (MA50) or 6.65%. ADVISE: Average Up accordingly.
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