Fixed Income Update 21 Mar 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 21 March 2024
Anticipating Guidance From The Fed
During the past week (14 Mar to 20 Mar '24), we observed the release of data from the US, particularly retail sales, weekly initial jobless claims, and PPI inflation, which emerged as the primary drivers of sentiment in the global market. Meanwhile, in Indonesia, the release of Retail Sales, Trade Balance, and the outcome of the RDG-BI regarding the BI Rate were eagerly awaited.
Referring to the results of the FOMC Meeting and the RDG-BI, we anticipate that sentiment for a Fed Rate reduction will continue to strengthen, with the possibility of a Fed Rate cut being realized in Jun or Jul '24. Subsequently, we anticipate that this development will lead to a decrease in the UST10Y. At the same time, we anticipate that this will create the possibility of a reduction in the BI Rate in Jun or Jul ‘24, thereby also contributing to a sentiment-driven decrease in SUN10Y yields.
Regards,
Fikri C Permana - KBVS Research Team