Fixed Income Update 08 Aug 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 8 August 2024
The Onset of Significant Volatility
Concerns about a recession, triggered by worsening US employment data, have become the primary topic at the start of this week. Additionally, this situation has been exacerbated by rising geopolitical tensions in the Middle East and the Korean Peninsula.
These conditions led to a "Black Monday" on August 5, 2024, causing a sell-off in the stock market and a sharp decline in global government bond yields simultaneously. However, the following day saw a turnaround in global financial markets, or "Turnaround Tuesday“, as better-than-expected data was released in the US.
A similar trend was observed in the Indonesian market, with the Jakarta Composite Index (JCI) dropping by -3.4% on Monday (Aug 5) and rebounding by +1.0% on Tuesday (Aug 6). Conversely, the SUN10Y fell by -3.9 bps on Monday (Aug 5) but rose by +0.82 bps (Aug 6) the next day.
Looking ahead to next week, market participants should pay attention to geopolitical developments and several data releases, particularly US employment and inflation data, as well as Indonesian data on consumer confidence and domestic retail sales.
Regards,
Fikri C Permana - KBVS Research