Global Market Update
• The 10-year U.S. treasury yield plunged to 1.45% on Friday (11/05/21) even after the lowest jobless claims were reported. U.S. treasury yields fell 2-9 bps along the curve.
• U.S. stocks market closed at gain last Friday (11/05/21). DJI led as it jumped 0.56%, followed by S&P 500 and Nasdaq Composite which hiked 0.37% and 0.20% respectively.
• U.S. Non-Farm Payrolls increased 531,000 in Ocy-21. The figure was higher than previous month at 312,000 and consensus expectation at 450,000.
• U.S. unemployment rate also dropped to 4.6% in the same period, lower than the previous month’s at 4.8% and considered the lowest since the start of pandemic.
• Meanwhile Eurozone’s retail sales recorded a fall of -0.3% MoM in Sep-21, primarily weighed down by arising of Covid-19 cases and lower consumers’ confidence due to inflationary pressures. This figure was below the previous month’s at 1% and market forecast of 0.3%.
• Elsewhere in China, an increase in trade surplus was shown in Oct-21 amounted to USD84.54bn, above the estimate of USD65.55bn and previous month figure at USD66.76bn.
• China’s exports grew 27.1% YoY on the back of higher demand in shipments. Meanwhile imports rose slower at 20.6% YoY, primarily contributed by purchases of coal and natural gas.
Domestic Market Update
• The 10-year rupiah denominated government bond yield slightly unchanged at 6.05% Friday (11/05/21). This is in line with our daily forecast range of 6.00%-6.10%.
• The value of rupiah slightly appreciated against at USD to IDR 14,331/USD last week. Meanwhile 5-year Indo CDS rose to 81.50 bps.
• Indonesia’s GDP expanded 3.51% YoY in 3Q21, lower than our forecast and consensus estimate at 3.59% YoY/3.88% YoY due to the implementation of PPKM Darurat.
• Indonesia FX reserves stood at USD145.5bn in Oct-21. FX reserves position was lower than previous month of USD146.9bn. The decline was driven by government external debt payment.
• However FX reserves position remained adequate to support the external sector resilience and maintain macro and financial system stability
• As of November 5, vaccine jabs in Indonesia has hit >200mn doses. According to Ministry of Health data, government vaccination program coverage achieved 40% for full dose target and 60% for the 1st dose.
Market Projection
• Given the drop in U.S. treasury yields , we expect the 10-year Indo GB to follow the suit and traded within range of 6.00% - 6.10% today (11/08/21).
• Attractive Indo GB series to be traded today : FR0086, FR0090, FR0071, FR0078, FR0087, FR0091, FR0068, FR0088, FR0083 and FR0092
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