USD/IDR – Rupiah Weakening Bias Resumes.
Dec-12 03:02
- USD/IDR is up at 15,942 in Jakarta morning; versus yesterday’s close of 15,915.
- The pair's uptrend remains in place, free of all key resistance levels, the next key technical support will be 16,000.
- Bloomberg Asia dollar spot index is down by -0.04% and the Bloomberg Dollar spot index is -0.17% lower.
- USD/IDR one-month implied volatility is up this morning to 6.21%, versus 6.18% for yesterday’s close.
- Indonesia's 10-year bond yield is at 6.946%
- Indonesia 5 yr USD CDS at 70bps (Friday close 71bp, 5-year low 38bps in 2020).
Headlines
- Indonesia’s state budget deficit widened to 401.8t rupiah as of end-Nov., equivalent to 1.81% of GDP, Finance Minister Indrawati says in briefing. (source: BBG)
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ASIA STOCKS: China Plans To Cut Homebuying Taxes, Stocks Steady
Nov-12 03:02
China is preparing to cut taxes for home purchases in major cities like Beijing and Shanghai to revive the struggling housing market. The plan could lower the deed tax to 1% from the current rate of up to 3%, removing the distinction between ordinary and luxury homes, significantly reducing costs for buyers looking to upgrade. This comes after Finance Minister Lan Fo'an hinted at more aggressive fiscal policies, alongside a recently announced 10t yuan ($1.4 trillion) debt swap for local governments.
- October saw the first rise in residential property sales for 2024, but the recovery was uneven, benefiting mostly state developers and existing homes.
- The government has already implemented measures such as cutting mortgage rates, relaxing buying restrictions, and easing down payment rules. However, further support is expected as market confidence remains shaky.
- Property stocks have seen little reaction, the Mainland Property Index is +0.50%, HS Property Index -0.25%, CSI 300 Real Estate Index +0.25%, while the BBG Chinese Property Developer Gauge is -0.90% lower.
GOLD: Drops To Lowest Level Since October 10
Nov-12 02:58
Gold is steady in today’s Asia-Pacific session, following a 2.4% decline yesterday to $2,619/oz, its lowest level since October 10.
- The cash US treasury market was closed on Monday in observance of the Veterans Day holiday, but Treasury futures (TYZ4) were weaker. US treasury yields are 1-3bps higher in today’s Asia-Pac session. Higher rates are typically negative for gold, which doesn’t pay interest.
- The S&P 500 reset its record high (6017.31) yesterday, though it failed to hold its early advance. The Russell 2000 Index was up ~1.5%, reaching its highest level since 2021. European equities made solid gains with the Euro Stoxx closing 1.2% higher.
- Despite the move on the back of the strong US dollar, Deutsche Bank remains bullish on gold long-term, supported by a higher rate of central bank accumulation.
- According to MNI’s technicals team, the trend condition in gold remains bullish and the latest pullback appears corrective. However, yesterday’s sell-off delivered a print below the 50-day EMA, at $2,646.2, turning attention to $2,604.9, the Oct 8 low.
- Silver also fell by a further 2.2% on Monday, narrowing the gap towards $30.269, a trendline support.
US TSYS: Tsys Yields Trade Cheaper, Curve-bear Flattens
Nov-12 02:30
- Tsys futures are trading in narrow ranges so far today, TU is currently +01¼ at 102-22⅝, TY is +04 + is 110-01+ both largely inline with opening levels.
- Cash tsys have reopened with a flattening move, yields are flat to 3.5bps higher, with the 3yr yield underperforming. The 2yr is +2.5bps at 4.277%, while the 10yr is +1.8bps at 4.322%. The 2s10s is testing recent lows, at 4bps back at October 10 levels.
- Fed futures are pricing 17bps of cuts at the December meeting with cumulative 25.7bps of cuts priced in by the January meeting.
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