Global Market Update
• The 10-year U.S. treasury yield edged down 1 bps to a level of 1.48% on Monday (12/27/21).
• U.S. short-end treasury yields hiked 1-5 bps along its curve, while belly and long-end tenors’ yields dipped 1-3 bps compared to last trading day.
• U.S. stocks market gained last night with DJI added 0.98%, S&P 500 rose 1.38% and Nasdaq Composite was up 1.39%.
• U.S. manufacturing index posted by the Fed Dallas noted a fall to 8.1 in Dec-21, lower than the previous month’s at 11.8.
• Japan's longer term maturity bonds were untraded in holiday-thinned trade, while an auction for two-year notes saw stronger demand than the previous issuance.
• According to Reuters, the government auction for two-year notes received bids worth 4.25 times the amount sold, higher than the bidcover-ratio of 4.05 times at the previous auction.
• China’s industrial profits growth softened to 9% YoY, equivalent to CNY805.96bn in Nov-21 significantly lower than Oct-21’s pace at 24.6% YoY.
• In total from Jan-Nov, 33 of 41 surveyed industries reported a gain, amounted to CNY7.98bn.
Domestic Market Update
• The 10-year Indo GB slipped remained flat at 6.32% on Monday (12/27/21), still aligned with our daily projection range of 6.25-6.35%.
• The value of IDR against USD slightly depreciated to IDR14,227/USD yesterday. At the same time, 5-year Indo CDS climbed up to 76.26 bps.
• Indonesia’s Tax Directorate General reported a net tax revenue of IDR1,231.87tn as of December 26th, exceeding the annual target of IDR1,229.6tn or achieving 100.2% of the APBN 2021.
• We believe with the recent development of government revenue and spending, budget deficit could be brought down to -5.17% GDP, lower than target of -5.70% GDP.
Market Projection
• Given the recent development, we expect the 10-year Indo GB yield to move within range of 6.25-6.35% today.
• Attractive Indo GB series to be traded today: FR0081, FR0084, FR0086, FR0090, FR0071, FR0078, FR0082, FR0087, FR0091, FR0092.
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