Global Market Update
• The U.S. 10-year treasury inched up 2 bps to 1.44% on Thursday (12/02/21). U.S. treasury yields increased 1-7 bps along the curve.
• U.S. stocks market gained last night with DJI jumped 1.82%, S&P 500 added 1.42% and Nasdaq Composite grew 0.83%.
• The weekly jobless claims in U.S. was recorded at 222,000 for the week ending of November 27th, up from 194,000 within the prior week but remained below the market forecast of 240,000.
• On the 4-week moving average, U.S. unemployment claims fell to 238.75K as of November 27th where this rate considered as the new pandemic low.
• U.S. job-cuts level also slid to a level of 14.875 K in Nov-21, a 34.8% below the Oct-21’s figure hitting the lowest in almost three-decades time. These downturns indicate a brighter picture for U.S. labor market and possibly faster tapering timeline, amid risks posed by the Omicron variant.
• During its meeting yesterday, OPEC+ decided to add 400,000 bpd per Jan-22, still with a high concern placed on the incline of Covid-19 new variant cases possibly dragged down oil demand and forced a hike on its future price.
• In order to tackle the global spread of Omicron variant, Germany proposed a legislation where vaccination should be mandatory and will be effectively implemented after Feb22. Yesterday, the German government also stated that the unvaccinated will be forbidden from all businesses despite the essential ones, such as groceries and pharmacies.
• Bank of Japan (BoJ) board member Hitoshi Suzuki hinted that its pandemic-relief funding programmes may not be extended beyond Mar-22, as it has successfully improved many companies’ funding conditions.
Domestic Market Update
• The 10-year Indo GB inched up 6 bps to 6.19% on Thursday (12/02/21), still in line with our daily projection range of 6.10-6.20%.
• Throughout Nov-21, foreign investors booked a net sell of IDR31 T in Indo GB market as their holding position in government tradable securities dropped from IDR949.3 T in Oct21 to IDR918.5 T in Nov-21.
• The yield of Indo GB benchmark series (FR0086, FR0087, FR0088, FR0083) continued to rise as it has been crossing its 20-day moving average yield. We expect this trend to continue in Dec-21.
• The value of IDR against USD weakened to IDR14,378/USD yesterday. While 5-year Indo CDS dropped to 88.02 bps.
• All in all, the spread of Omicron variant of Covid-19, risk of uncertainty lingering economic recovery and inflation could push Indo GB yield movement to be more volatile.
Market Projection
• Given the rise in external pressure due to the spread of Omicron variant, we expect the domestic Indo GB market to rise with the 10-year Indo GB yield to move within range of 6.15%-6.25% today.
• Attractive Indo GB series to be traded today: FR0081, FR0084, FR0086, FR0090, FR0071, FR0078, FR0082.
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