Global Market Update

• On December 18th, 2024, the U.S. 10 Years Yield closed at 4.5140%.
  
• The Fed cut interest rates by 25-bps in December 2024, the third cut this year, lowering rates to 4.25%-4.50%, as expected. Policymakers now expect only two rate cuts in 2025, totaling 50-bps, down from the 100 basis points projected earlier.
• Eurozone annual inflation rose to 2.2% in November 2024, up from 2% in October but below the 2.3% forecast. The increase was driven by base effects, with energy prices falling less sharply (-2% vs -4.6% in October) and higher costs for non-energy industrial goods (0.6% vs 0.5%).

            Sources: Federal Reserve, Eurostat, Trading Economics, and Bloomberg.





Domestic Market Update

• On December 18th, 2024, the Indonesia Government Bond 10 Years Yield closed at 7.0858%.
  
• Bank Indonesia decided to maintain the BI Rate at 6.00%, the Deposit Facility rate at 5.25%, and the Lending Facility rate at 6.75%. This decision aligns with monetary policy to keep inflation within the 2.5±1% target for 2024-2025 while supporting sustainable economic growth. The focus remains on strengthening Rupiah stability amid rising global economic uncertainty .
  
• Loan growth remained strong in November 2024, reaching 10.79% (yoy). On the supply side, this was driven by steady bank lending interest, liquidity reallocation to loans, strong deposit growth, and BI's KLM program supporting priority sectors like downstream mining, food, automotive, trade, energy, tourism, creative economy, SMEs, and green initiatives. On the demand side, corporate performance, including export-oriented firms, supported the growth.
  

            Sources: Bank Indonesia and PHEI.



Market Projection
We predict the 10-year Indonesia Government Yield Curve will continue to move within range 6.9647% - 7.1054% for Today. Recommendations: FR0102, FR0097, FR0089, FR0105, FR0100, PBS038, PBS033, PBS005, ORI023T6, ORI025T6 and ORI024T6.

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