IDR: Rupiah Opens Weaker after the Break.
Jan-30 02:48
- USD/IDR opens lower at 16,242 from Friday nights close of 16,173.
- The rupiah finished last week +1.17% better.
- The rupiah’s selloff has seen the rupiah breach the 20-day EMA of 16,231. Other key tech levels are 50-day EMA 16,084, 100-day EMA 15,957 and the 200-day EMA of 15,862.
- Bloomberg Asia dollar spot index is up by +0.13% and the Bloomberg Dollar spot index is down -0.18%.
- USD/IDR one-month implied volatility is up this morning to 6.5575%, versus 6.5325% for yesterday’s close.
- Indonesia's 10-year bond yield is at 6.973%.
- Indonesia 5 yr USD CDS at 76bps (Friday’s close 76bp, 5-year low 58bps in 2020).
Headlines
- Indonesia aims to reduce state spending by about 8.5% this year as a scrapped tax hike pressures the currency and leaves officials scrounging for funds for priority projects. (source: BBG).
- Indonesia’s central bank still sees scope for further monetary easing to help propel economic growth to its 5.2% target this year. Bank Indonesia sees room for more cuts to its benchmark interest rate, amid low inflation and the likelihood that the rupiah will strengthen, Governor Perry Warjiyo said in a briefing (source: BBG).
Upcoming Economic Data
- S&P Global Indonesia PMI – 03 Feb.
- CPI – 03 Feb.
- GDP – 05 Feb.
Government Bond Issuance Today.
- Bank Indonesia to Sell 28D SVBI Bills
- Bank Indonesia to Sell 182D SVBI Bills
- Bank Indonesia to Sell 91D SVBI Bills
- Indonesia To Sell 2029 Sukuk Bonds (PBSG001)
- Indonesia To Sell 2028 Sukuk Bonds (PBS030)
- Indonesia To Sell 2027 Sukuk Bonds (PBS003)
- Indonesia To Sell 2039 Sukuk Bonds (PBS034)
- Indonesia To Sell 2049 Sukuk Bonds (PBS038)
- Indonesia To Sell 154D Sukuk Bills (SPNS07072025)
- Indonesia To Sell 252D Sukuk Bills (SPNS13102025)
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FOREX: US Dollar Trending Lower After US Yields Drop
Dec-31 02:06
G10 currency moves have generally been limited with holiday-impacted trading thin. The greenback has trended lower through most of the session after yields fell on Monday, the BBDXY USD index is down 0.1%. The yen has moved the most against the US dollar with USDJPY down 0.3% to 156.42, close to the intraday low. JPY strengthened on Monday as US equities sold off and that trend has continued today with US equity futures slightly lower.
- AUDUSD is up 0.1% to 0.6229, close to the intraday high, after a low of 0.6211 earlier. It may face downward pressure with A$620mn of options due to expire on January 2 at 0.6175. There is also little support for Aussie from risk appetite. AUDJPY is down 0.2% to 97.42.
- NZDUSD is moderately higher at 0.5642 following a drop to 0.5633. AUDNZD is up 0.1% to 1.1040.
- EURUSD and GBPUSD are slightly higher at 1.0411 and 1.2559 respectively.
- Japan, South Korea and Thailand are closed and the equity markets that are open are currently mixed. The Hang Seng is up 0.2% but the CSI 300 is down 0.2% and the ASX -0.6%. Copper is up 0.1% and iron ore is around $101/t.
- Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
- US October house price data and December Dallas Fed print later.
CHINA DATA: Non-Manufacturing Sector Drives PMI Improvement
Dec-31 01:46
China’s PMI data showed activity expanding at a faster rate in December driven by the non-manufacturing sector with industry remaining lacklustre. The composite PMI picked up to 52.2 from 50.8 due to a 2.2 point rise to 52.2 in services, which was stronger than expected.
- Manufacturing disappointed though with the PMI moving closer to the breakeven-50 mark at 50.1 after 50.3 last month. Lacklustre domestic growth has prompted officials to announce that there will be more fiscal and monetary stimulus in 2025, but details remain vague.
- The better-than-expected non-manufacturing PMI has supported USDCNH with most of its decline today sustained with the pair at 7.3057 close to its intraday low at 7.3053. The CSI 300 opened little changed and is currently down moderately.
BONDS: NZGBS: Closed Richer On A Shortened Pre-Holiday Session
Dec-31 01:45
On an abbreviated last session of the year, NZGBs closed richer, with benchmark yields 4-8bps lower.
- The local calendar was empty today. CoreLogic Home Values will be released on January 2.
- There has been no cash dealing in US tsys today with Japan out for a bank holiday. TYH5 is +0-03+ firmer at 109-02+ after Monday’s solid gains. Today’s US data (prior, est) includes FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, Dallas Fed Services Activity (9.8, --) at 1030ET.
- Swap rates closed 5-7bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed little changed across meetings. 55bps of easing is priced for February, with a cumulative 123bps by November 2025.
