Today’s Outlook:
US MARKETS: Initial Jobless Claims were released at 231k, higher than the forecast of 220k jobless claims last week. Meanwhile, the Philadelphia Manufacturing Index, which measures business conditions in Philadelphia, is still in contractionary territory despite improving slightly above forecasts. Both of the above data raised concerns of an economic slowdown situation, just at a time when the Fed is expected to keep interest rates high for some time. As if to echo those thoughts, Industrial Production (Oct) also extended its contraction and was the lowest negative growth in 4 months. Tonight at around 20:30 GMT, the Building Permits and Housing Starts (Oct) data will be awaited, which will assess the health of the US property sector.

COMMODITIES: Energy stocks fell more than 2% as Crude Oil prices plunged below USD73/barrel triggered by demand concerns. Chinese refineries processed less Oil in October than the previous month, raising questions whether the demand outlook from the world’s largest Oil importer is weakening, as the global economic slowdown also weighs on the upside potential of Crude Oil prices. Oil prices slumped nearly 5% to their lowest point in 4 months, dragging Brent down to USD 77.42/barrel, while WTI dropped to USD 72.90/barrel. Speaking of supplydemand, OPEC and the International Energy Agency (IEA) have both predicted that inventories will get tighter in the 4th quarter of this year, but at the same time data from the US shows that their stockpiles are abundant; making Crude Oil prices lose its competitiveness.

EUROPEAN MARKETS: Several economic data will be awaited from the European continent; starting from the UK, which this afternoon will release Retail Sales growth (Oct.), followed by important macroeconomic data from the Eurozone, CPI (Oct.) where the Inflation rate is expected to soften to 2.9% yoy, from 4.3% in the previous month.

Corporate News
Refinancing, Tower Bersama (TBIG) Offers IDR 1.51 Trillion Bonds Tower Bersama Infrastructure (TBIG) will offer bonds worth IDR 1.51 trillion. The bonds are part of the sustainable bonds phase VI totaling IDR 20 trillion. The bonds are offered with a fixed interest rate of 6.75% per annum, and a term of 370 calendar days from the date of issuance. All bond proceeds, after deducting issuance costs, will be loaned USD 62.16 million or the equivalent of IDX 975.8 billion to Tower Bersama (TB) for the repayment of all principal loans. Then, the remaining maximum of USD 34 million equivalent to IDR 533.8 billion to Solu Sindo Kreasi Pratama (SKP) for partial payment of loan principal. (Emiten News)

Domestic Issue
Driven by Election Sentiment, Corporate Bond Issuance is Projected to be Vibrant Next Year Corporate bond issuance activity is predicted to be more vibrant in 2024. The general election (election) season is considered to encourage companies to issue bonds. Head of the Economic Research Division of PT Pemeringkat Efek Indonesia (Pefindo) Suhindarto said that the issuance of corporate bonds next year will be more crowded than in 2023. This is in line with the number of corporate bonds that will mature in 2024. Based on Pefindo data as of the end of October, the maturity value of debt securities in 2024 amounted to IDR 146.12 trillion. This amount is much higher than this year 2023 which only amounted to IDR 126.89 trillion and the second highest after the second after 2022 which reached IDR 155.19 trillion. Darto estimates that there will be higher refinancing needs in 2024. This is in line with the value of debt securities maturing next year which is greater than this year. Corporations are also more willing to issue debt securities because the economy is moved by various activities related to the simultaneous elections. Not only the Presidential election, next year there are also regional head elections in many provinces, “So this will encourage economic activity to remain solid. Companies need additional funding to respond to increased demand,” added Darto. (Kontan)

US10YT is testing the previous low support around 4.44% yield in order to fulfill the bottom target around 4.31% yield. ADVISE: reduce position. The nearest resistance is MA10 at 4.55% yield.

ID10YT is expected to test the support from the previous low level around 6.70% yield, in order to go down to 6.465% yield. ADVISE: reduce position. The 3-layer Moving Average resistance prevents the yield from rising within the 6.80% – 6.97% range.

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