Company Update

24 Desember 2021

Fixed Income Report - December 24, 2021

Global Market Update

• The 10-year U.S. treasury yield increased 4 bps to 1.49% on Thursday (12/23/21). U.S. treasury yields followed by rising 1-5 bps along the curve.
• U.S. stocks market gained last night with DJI climbed 0.55%, S&P 500 surged 0.62% and Nasdaq Composite jumped 0.85%.
• U.S. Department of Labor recorded no changes in its unemployment claims for the week ended December 18th, remained at 205,000 in line with the market expectations.
• Both U.S. personal income and spending pace softened to 0.4% and 0.6% consecutively in Nov-21, meeting the consensus estimates which was attributable to the wages increase and holiday shopping.
• The personal consumption expenditure (PCE) price index in the U.S. hiked to 118.20 in Nov-21, equivalent to 5.7% YoY hitting its peak in 39 years. Its core PCE prices also rose to 4.7% YoY, slightly above Oct-21’s rate at 4.2% YoY.
• Canada’s monthly GDP grew to 0.8% MoM in Oct-21, aligned with the market forecasts where 17 of 20 industries reported a gain within the month.
• Meanwhile, Spain’s GDP annual rate grew at a slower pace of 3.4% YoY in 3Q21, well below the previous quarter’s figure at 17.7% YoY.
• The consumer confidence in Italy increased slightly to 117.7 in Dec-21, up from the previous month’s at 117.5 despite the rising emergence of Omicron variant.

Domestic Market Update
• The 10-year Indo GB edged down 1 bps to 6.35% on Thursday (12/23/21), still aligned with our daily projection range of 6.30-6.40%.
• The decline in the 10-year Indo GB yield was also in line with rupiah appreciation.
• The value of IDR against USD appreciated to IDR14,249/USD yesterday. Meanwhile, 5-year Indo CDS rose to 76.99 bps.
• Bank Indonesia (BI) reported an increase in Indonesia’s money supply (M2) to IDR7,572.2tn in Nov-21, equivalent to 11% YoY growth which was slightly higher than Oct-21’s pace at 10.5% YoY.
• Factors affecting the growth of M2 in were the acceleration in credit supply and net foreign assets 4.4% and 10.6% YoY respectively, up from 3.0% and 5.7% YoY recorded in the previous month. All in all the liquidity in the economy remained ample.

Market Projection
• Given the recent development, we expect the 10-year Indo GB yield to move within range of 6.30-6.40% today.
• Attractive Indo GB series to be traded today: FR0081, FR0084, FR0086, FR0090, FR0071, FR0078, FR0082, FR0087, FR0091, FR0092.

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