INDONESIA: Despite Fiscal Concerns, Still Scope For Lower Front End Yields

As has been the case recently, CNH has ignored the China data outcomes, which were mostly weaker than forecast for Nov. USD/CNH is back under 7.0500 now, although hasn't been able to make fresh cycle lows under 7.0480 at this stage. The USD/CNH-USD/CNY basis remains modestly negative, with onshore spot still above 7.0500. A weaker USD/JPY trend so far today, along with on-going positive yuan seasonality, are CNH positives. The broader backdrop around China's large trade surplus position and depressed levels in real effective exchange rate terms, also continues to fuel cheap CNY valuation talk. Whilst Q4 growth momentum looks soft, it seems unlikely we will see fresh policy stimulus measures in the near term. Last week's economic work conference still suggests a steady approach to further stimulus. 

• If USD/CNH can sustain sub 7.0500, the next downside focus point will be 7.00.
• Note Goldman Sachs has also revised higher its CNY forecast recently: "For much of this year we have argued that the deep undervaluation of CNY along with its booming export growth warranted a stronger currency. And that is reflected in our 3 and 12m forecast for USD/CNY of 6.95 and 6.85 respectively, both stronger than consensus and forward markets. As per our valuation deep dive, the Yuan is around 25% undervalued on a weighted average of our two valuation models, a level of undervaluation compared to the last ‘China Shock’ in the early- to mid-2000s. " 

Bitcoin had a range over the weekend of $88,398.00k - $90,646.94k, Asia is currently trading around $89,400k, +1.05%. Bitcoin slipped lower over the weekend and opened weaker again in Asia before early demand has seen it bounce back toward $90k. The range for the moment looks to be $84k-$96k, technically though it is still in a downtrend so while this remains the case bounces back towards the $96-$101k area looks like it would be faded initially. First support remains back toward the $84k-$86k area, a break below here and the market will again turn its focus back to the $70k-$75k support. 

• EndGame Macro on X: “It’s also worth remembering that Bitcoin has never lived through a long, credit driven recession and the closest test was 2020, which quickly turned into a liquidity flood. So in the early stages of stress, it tends to behave like a high beta risk asset, not a shelter. That’s why moves like this are often the market quietly saying it wants less risk on the books, not more.”
• Bitcoin’s Average True Range(ATR) for the last 10 Trading days: $2,903 

Fig 1: Bitcoin spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• Following on from the release of further price decrease in new and used homes, November property Investment and Property Sales fell to lows of the year.  
• Property Investment YTD YoY fell -15.9%, the lowest in more than 3-Years.
• New home sales value fell -11.2% YoY, new property construction fell -20.5% YoY.  
• The fall in Residential Property sales accelerated in November to -11.2%, from -9.4% YoY, the largest drop in 2025.  
• The combined result is the worst in 5-Years
• The weakness in consumer is the challenge right now as the property sector declines continue.  Finding a way of halting the slide in prices and hence investment must be key to start the process of rebuilding consumer sentiment.