Factory orders exceeded expectations and UST inverted yields, sending Wall Street closed mixed. May US Factory Orders grew +1.6% (Vs. Surv. +0.5%), following May Personal Spending which grew moderately +0.2% (Vs. Surv. +0.4%).
Mixed Benchmark Ahead of SUN Auction. The FR0091 series posted a slight 1.5 bps yield to 7.26% earlier in the week.
The potential for a recession makes analysts’ expectations high. Even though Wall Street is on holiday to commemorate Independence Day, market players are still waiting for the FOMC Meeting Minutes and are starting to anticipate next week’s CPI data.
Weekend Depressed Benchmark Series. US PCE Core Deflator in May was up +0.3% MoM (+4.7% YoY); still high compared to last month’s +0.3% MoM (+4.9% YoY), supporting the Fed’s aggressive Hawkish stance in July, which is projected to increase FFR by 75 bps to 2.25%-2.50%.
Inflation Above Target and Rupiah at 15,000.
Manufacturing activity slowed, giving the Fed room to be Dovish in September. Data shows US June ISM Manufacturing fell to 53.0 (Vs. May 56.1).
Negative sentiment GDP contraction, investors are interested in the safe haven of SUN. US GDP Annualized QoQ 1Q22 contracted -1.6% (Vs. Surv. -1.5%), as inventories of unsold goods increased, amid falling consumer spending.
Personal Consumption Expenditures high, Wall Street closed 2Q22 lower.
Fears of a soft recession, investors are interested in Safe Haven. Benchmark FR91 yields fell 5 bps, and FR90 even fell 24 bps a week.
