Fixed Income Update 13 Jun 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 13 May 2024
Anticipating Signals of a Potential Fed Rate Cut
Last week's focus was on the US jobs report data, which generally showed mixed results, including:
• Weekly initial jobless claims for the week ending Jun 1st increased to 229K (Cons: 220K, Prev: 221K).
• The unemployment rate in May '24 rose to 4.0% (Cons: 3.9%, Prev: 3.9%).
• The participation rate in May '24 fell to 62.5% (Prev: 62.7%).
On the other hand:
• Non-Farm Payrolls in May '24 added 272K jobs (Cons: 185K, Prev: 165K). Led by Health Care (68K), Government (43K), Leisure & Hospitality (42K), and Professional, Scientific & Technical Services (32K).
• Average hourly earnings for all employees in May '24 increased by 14 cents, or 0.4% MoM (Cons: 0.3% MoM, Prev: 0.2% MoM).
• US-based employers in May '24 announced plans to cut 63,816 jobs, -1.5% lower than in Apr '24 or -20.3% YoY.
Last week began on a positive note with an increase in FX Reserves by USD2.8 bn in May '24, reaching USD139.0 bn (Prev: USD 136.2 bn). This rise was driven by tax and service revenues, as well as the issuance of an Indonesian global bond worth JPY200 bn on May 27th. However, a decline in Consumer Confidence across all index components was followed by a reversal in Retail Sales for Apr '24 to -2.70% YoY (Prev: 9.30% YoY), marking the first decline in the past 11 months. Additionally, Automobile Sales continued to drop in May '24, recording a -13.3% YoY decrease.
Regards,
Fikri C Permana - KBVS Research