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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
IDR
Onshore markets have re-opened today, and USD/IDR is breaking lower. The pair was last at 14935, down nearly 1% versus closing levels from last Friday. Earlier lows were close to 14900, which is back to mid September levels from 2022. We are comfortably below all key EMAs (200 day is 15145.7).
- IDR is riding the better risk appetite tone, while net inflows into local bonds have rebounded strongly since the start of the year. Foreign holdings are up close to 5%. Up to Jan 19 we had net inflows of just under $2.4bn into local bonds. The onshore 10yr yield has fallen from early Jan highs around 7.10% to 6.63% today.
- Hopes of a less hawkish Fed backdrop is no doubt aiding such flows, with USD/IDR also tracking US real yields lower.
- Equity flows have stabilised somewhat but are still down for the year (-$291.9mn).
- The recent recovery in IDR has bought it more into line with the recovering ADXY trend, see the chart below (note the ADXY is inverted on the chart).
- January tends to be a strong seasonal month for IDR, rising in 7 out of the last 8 January's. This month though the currency is +4% higher against the USD, comfortably the best performing month for this sample period.
- IDR is second behind THB in terms of best performers within the Asian FX bloc YTD.
- The data calendar is quiet over the next week.
Fig 1: IDR Playing Catch Up With ADXY Rebound
Source: J.P. Morgan/Bloomberg/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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