Fixed Income Update 27 Feb 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 27 February 2025
The Continuation of the Decline in Risk-Off Sentiment
Recent U.S. data releases indicate economic weakness across the labor market, housing sector, industry, and consumer demand. At the same time, these developments have been supported by easing political risks in Germany following the victory of the CDU/CSU party. These two conditions have begun to reduce global economic risks, leading to a decline in the DXY and global government bond yields over the past week.
A similar trend has also driven a decline in SUN yields. However, the extent of the decline has been relatively limited due to Rupiah depreciation. This was further exacerbated by continued sell-offs in the equity market. Last week (Feb 17–20, ‘25), Bank Indonesia recorded a net foreign sell-off in the equity market amounting to IDR0.46 tn. Adding to the pressure on the equity market, Morgan Stanley downgraded MSCI Indonesia’s stock rating from "equal weight" to "underweight" in its latest research. This downgrade further triggered a net foreign sell-off of IDR1.6 tn on Feb 25, ‘25, a day after the report was released.
Regards,
KBVS Research Team