Fixed Income Update 07 Dec 2023
KBVS FIXED INCOME UPDATE
Thursday, 7 December 2023
The Rally Continues In The Fixed Income Market
The statements made by several officials of The Fed - Waller, Bowman, and Powell - conveying a less-hawkish (or somewhat dovish) tone last week, served as the primary driver of sentiment in the global fixed income market. This sentiment shift was accompanied by worsened data regarding new home sales in the US, as well as the release of lower-than-expected US ISM Manufacturing PMI data for Nov '23. Additionally, the US GDP data for 3Q23, revised upward to 5.2% YoY, and the US GDP Price Index returning to the anticipated economic levels, played significant roles.
Meanwhile, domestically, aside from the impact of global sentiment, the release of the Manufacturing PMI recording 27 consecutive months in the expansion zone and the rise in headline inflation to 0.38% MoM or 2.86% YoY were contributing factors influencing movements in the domestic fixed income market last week.
The focus this week will be on US labor market data
• The deteriorating US JOLTs Job Openings, released on Tuesday (5 Dec'23),
• ADP Non-Farm Employment Change on Wednesday (6 Dec '23),
• Weekly Initial Jobless Claims on Thursday (7 Dec'23), then
• Nonfarm Payrolls, Participation Rate, and unemployment rate data on Friday (8 Dec '23), alongside inflation expectations.
Meanwhile, in Indonesia, the release of FX Reserves today, followed by consumer confidence and Retail Sales data tomorrow, will be significant points of attention.
However, overall, we still anticipate the possibility of a decline in UST and SUN yields this week.
Regards,
Fikri C Permana - KBVS Research Team