INDONESIA CENTRAL BANK: Bank Indonesia Stands Pat On Rates
Dec-18 07:36
Bank Indonesia keeps the key policy rate unchanged at 6.00%, as predicted by a majority of 21 out of 34 economists polled by Bloomberg, with the other 13 calling for a 25bp cut.
- The central bank said that the decline in the fed funds rate might be slower than expected, while global growth this year will likely be +3.1% Y/Y as opposed to +3.2% predicted earlier.
- Bank Indonesia's FX policy is still focused on rupiah stability, with the central bank noting that recent rupiah weakness has been manageable.
- The growth outlook and inflation outlook for 2024 were left at +4.7%-5.5% Y/Y and +1.5%-3.5% Y/Y respectively. Next year's growth is seen at +4.8%-5.6% Y/Y.
- Spot USD/IDR crossed above the 16,000 figure last Friday and remains above that threshold. The rupiah has held earlier losses in the wake of the BI's rate decision.
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STIR: Implied ECB Cuts A Little Less Dovish Versus Friday’s Close
Nov-18 07:36
ECB-dated OIS price 142bps of easing through the end of next year, ~2.5bps less dovish compared to last Friday’s close but still up from ~135bps at the start of last week. Current pricing is consistent with sequential 25bp cuts at the next five meetings through June 2025, with 128bps of cuts priced.
- Over the weekend, ECB Vice President de Guindos re-iterated his confidence with respect to inflation (notwithstanding still-high services inflation) and the need to further analyse why “growth is so fragile”.
- Executive Board member Cipollone spoke on “the conditions for a cyclical recovery in euro area productivity” in a speech last Friday on, touching on some of the potential drivers of the weak growth outlook.
- Several ECB speakers are scheduled today and through the week (Lagarde, Lane, de Guindos, Nagel, Makhlouf, and Stournaras are due today).
- This week’s regional data calendar is headlined by Friday’s November flash PMIs, but Q3 balance of payments, vacancies, preliminary labour costs and negotiated wages are also due.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Dec-24 | 2.864 | -30.1 |
| Jan-25 | 2.538 | -62.7 |
| Mar-25 | 2.230 | -93.5 |
| Apr-25 | 2.026 | -113.9 |
| Jun-25 | 1.883 | -128.2 |
| Jul-25 | 1.815 | -135.0 |
| Sep-25 | 1.770 | -139.5 |
| Oct-25 | 1.755 | -141.0 |
| Dec-25 | 1.744 | -142.1 |
| Source: MNI/Bloomberg. | ||
EURIBOR OPTIONS: Decent size Put Spread
Nov-18 07:35
ERG5 97.62/97.50ps 1x2, bought for flat in 15k.
USD: Finding a broader bid into the European session
Nov-18 07:34
- A mostly flat session for the Dollar overnight, the Pound was up 0.14%, and at the other end, the Kiwi was down 0.12%.
- Going into the European session, the Dollar is the early mover, testing an intraday high against the AUD, CNY, CNH, THB, SGD, CAD, NZD.
- The bigger picture is that the Dollar is king and in the Green across the Globe YTD, only the ZAR, MYR, and HKD are in the green for that period.
- Given that latest early leg higher in the Dollar, the Kiwi has extended losses, now down 0.32%, and worth keeping an eye here at the 0.5840 level, last Week's low and the lowest printed level since 01/11/23 in NZDUSD
