HIGHLIGHTS
- Yield of 10-year Indonesia Government Bonds is 7.052% on December 18, 2024, vs 7.061% the day before. Meanwhile, the UST 10-year yield rose to 4.50%, from 4.40% the previous day.
- Government bonds volume was IDR34.82 trillion, and it was dominated by medium term (5-15 years). It was dropped than the previous day transaction of IDR54.88 trillion. The volume lower than its YTD average of IDR45.25 trillion. While the outright transaction reached IDR10.53 trilion dropped from the previous day's transaction which amount to IDR20.59 trilion.
- Meanwhile, the total volume of corporate bonds was recorded at IDR1,794 billion, dominated by short term (< 5 years). The transaction volume dropped compared to the previous day's volume of IDR2,220 billion. The volume lower compared to this year's average of IDR1,946 billion. Meanwhile, outright transaction recorded at IDR1,675 billion fell from the previous day's transaction of IDR2,219 billion.
- The Rupiah exchange rate against the US Dollar weakened by 0.16% to IDR16,090 from IDR16,065 while the JCI dropped -0.70% from 7,158 to 7,108. Then Brent declined from 74.61 to 73.53 USD per barrel, while WTI Cushing Crude Oil Spot price dropped from 70.71 to 70.08 USD per barrel.
GLOBAL UPDATES
- Federal Reserve lowered their benchmark interest rate for a third consecutive time to 4.25%-4.50%. New quarterly forecasts showed several officials penciled in fewer rate cuts for next year than they estimated just a few months ago, and saw inflation making considerably less progress in 2025. They now see their benchmark rate reaching a range of 3.75% to 4% by the end of 2025, implying two quarter-percentage-point cuts, according to the median estimate. (Bloomberg)
DOMESTIC UPDATES
- Bank Indonesia has decided to keep the BI Rate unchanged at 6.00%, reiterating its priority on stabilizing the Rupiah amid heightened global uncertainty and stating the timing is not right for a rate cut. To drive economic growth, BI will *expand macroprudential incentives to additional sectors.
- BI continues to deepen the forex market, aiming to reduce volatility by lowering market dependence on the spot market for USD liquidity. Additionally, BI is ramping up intervention in the spot and DNDF markets to support IDR stability.
- We anticipates the first rate cut to occur in 2Q25, provided the Fed begins easing in March 2025. We maintain our forecast of a 50bps rate cut in 2025. (BI, BRIDS)
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