Fixed Income Update 14 Mar 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 14 March 2024
The Yield is Still Awaiting Developments in the Policy Rate
The rise in the unemployment rate in the US has led to a decrease in UST yields, whereas increases in Core and Headline CPI push in the opposite direction. The decline of domestic FX reserves by USD1.1 bn presents a notably negative trend for the development of the Rupiah. However, this is primarily driven by government debt repayments, exacerbated by a simultaneous increase in Chinese imports by +3.5% YoY.
The balance of money market-real sector-asset markets, which will influence the benchmark Fed Rate (FOMC meeting scheduled for 20 Mar '24), will be a focus in the upcoming week, indicated by initial jobless claims, PPI, retail sales, building permits, and housing starts. Meanwhile, domestically, the trade balance will be one of the focal points in maintaining the stability of the Rupiah, subsequently serving as a reference in assessing the development of the BI Rate to be decided at the RDG on 20 Mar ‘24.
Regards,
KBVS Research Team