The dollar stumbled on Monday, surrendering earlier gains following unexpected oil output cuts from OPEC+, as data showed the U.S. economy continued to slow with declines in manufacturing and construction spending. The dollar index, which measures the currency against a basket of six currencies including the euro, was down 0.9% at 102.01. On the other hand, the prospect of higher oil costs added to inflation worries on Wall Street just days after evidence of cooling prices on goods and services raised expectations that the U.S. Federal Reserve might soon end its aggressive monetary tightening campaign. Market participants are equally divided into two camps that count on a 25bps rate hike at the upcoming FOMC Meeting in May; or no hike at all, as reported by CME Fedwatch. As for today, we will look forward to reports on German Trade Balance (Feb.), Factory Orders (Feb.), and the highlights of the day, which are: US JOLTs Job Openings (Feb.) that could shed light on how the economy has reacted to the rate hike so far, as well as how the Fed should continue this policy.
Domestically, Inflation rate (Mar.) eased to 4.97% YoY from 5.47% on the previous month; Core Inflation also eased to below 3% (on track with central bank expectation) at 2.94% YoY, successfully lower than both forecast and previous period. Rupiah exchange rate still managed to stay below 15k, at IDR 14970/USD.
Corporate News
The Issuer Hartadinata Abadi Has IDR 400 M Bonds Maturing in June 2023 Pemeringkat Efek Indonesia (Pefindo) affirmed the “idA-” rating for the 2020 sustainable bonds I phase II issued by PT Hartadinata Abadi Tbk (HRTA) worth IDR 400 billion which will mature on June 5, 2023. Pefindo in its release explained, HRTA plans to pay off the maturing debt instruments using unused bank credit facilities or withdraw precious metal inventories recorded at IDR 1.02 trillion as of September 30, 2022. (Emiten News)
Domestic Issue
SBSN Auction Held Today Tuesday, April 4, 2023, With a Target of IDR 9 Trillion The government will conduct an auction of Government Sharia Securities (SBSN) or Government Sukuk today, Tuesday (4/4/2023). The SBSN series to be auctioned are the Sharia State Treasury Securities (SPN-S) and Project Based Sukuk (PBS), which aim to fulfill part of the financing target in the 2023 State Budget. There are six SBSN series that will be auctioned, including SPN -S 03102023 (new issuance), PBS036 (reopening), PBS003 (reopening), PBS037 (reopening), PBS034 (reopening), and PBS033 (reopening). Based on the official website of the Ministry of Finance’s DJPPR, the yields vary from 5.37 percent to 6.75 percent with tenors of three to 24 years. Please note the government set an indicative target for the SBSN auction of IDR 9 trillion. (Bisnis)
Recommendation
US10YT decided to break the MA10 Support, making the yield of 3.485% the closest resistance at the moment, followed by MA20 at 3.535%. The 10-year US Treasury yield benchmark is expected to return to test Support in the range of 3.368-3.321% yield. So far, RSI is still showing positive divergence, so expect a technical rebound around Support area. ADVISE: BUY ON WEAKNESS. ID10YT needs to prove its ability to face MA20 Resistance, making the yield of 6.887% the closest Resistance at the moment. If broken, it will free the way to the psychological level of 7.0% or the next TARGET around 7.057% / 7.189-7.202% yield. Meanwhile, monitoring the nearest Support MA10 / 6.859% yield is needed as well. ADVISE: Average Up accordingly.
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