Fixed Income Update 20 Jun 2024
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 20 June 2024
Divergence in UST and SUN Yield Movements
Following the dovish statement on Jun 12th by The Fed, the data releases that influenced yield movements in the week of Jun 13-19, ‘24 are as follows:
• Weekly initial jobless claims.
• US Factory gate prices or PPI.
• US Retail sales.
• The University of Michigan consumer sentiment for the US.
Meanwhile, from the domestic side, the sustained trade surplus in May '24, amounting to USD2.93 bn (Prev: USD2.72 bn - revised), marks the continuation of 49 consecutive months of trade surplus since Apr ’20. Concurrently, with the expectation of:
1. Continued expansion in China's PMI, and
2. Imports being used as components for re-exports, and
3. The trend of declining external debt to USD398.3 bn (Prev: USD404.8 bn) in Apr ’24,
we expect to further reduce the current account deficit throughout 2Q24 to only USD1.8 bn (Prev: USD2.1 bn), or 0.54% of GDP (Prev: 0.64% of GDP)
Regards,
Fikri C Permana - KBVS Research