Global Market Update
• Market concerns remained on the possible end year of 2021 tapering bond purchase as the discussion to rollback the stimulus was pictured in the Fed July-21 minutes of meeting.
• The 10 year U.S. treasury yield dipped by 2 bps on a weekly basis despite the tapering debates.
• In the last day of trading, the government benchmark yield closed at 1.26% after rising 2 bps from the previous day trading session.
• There was no data released scheduled on Friday (08/20/21).
• Global bonds yield remained low following a limited movement of U.S. treasury yield last week.
• What has limited the movement of yield to rise is still the risk of slower than expected growth due to Delta variant of Covid-19 widespread.
• The U.S. equity market finished higher in the last day of trading last week with DJI rose 0.65%; S&P 500 added 0.81% and Nasdaq Composite lead with 1.19% appreciation.
Domestic Market Update
• On Friday (08/20/21) the 10 year Indo GB yield jumped 4 bps higher to 6.37%, yet on the weekly basis the benchmark stayed flat.
• However the value of IDR depreciated against USD after declining by 0.49% to IDR 14,453/USD.
• Along with the risk premium, rupiah reacted negatively to possible the Fed tapering by the end of this year. However the declines of rupiah was not significant. As market participants have expected BI kept its 7 day reverse repo rate unchanged at a historically low of 3.5%.
• The domestic stock market ebbed lower by 1.8% on a weekly basis, yet the market recorded a net inflow of IDR2.34tn.
Market Projection
• We see that external pressures hiked recently but with a non-significant rate. We expect the 10 year Indo GB yield to move within range of 6.32%- 6.38% on Monday (08/23/21).
• Given the potential circumstance, the Indo GB series such as FR0086, FR0078, FR0087, FR0091, FR0072, FR0083, and FR0092 remain attractive to be traded
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