Global Market Update
• The 10 year U.S treasury yields slid 3 bps to 1.49% last night after reaching more than 1.5% in the previous days primarily due to a more hawkish stance of the Fed and concerns on U.S. debt ceilings.
• Fed’s Chair Jerome Powell warned again during a Congressional hearing on Thursday that inflationary pressures could last longer than expected, though he said he still believes surging price is a temporary phenomenon.
• At the same hearing, Treasury Secretary Janet Yellen again urged Congress to raise the debt ceiling.
• The House passed bill that would suspend the U.S. debt ceiling on Wednesday. However this measure is not expected to pass the Senate.
• As of September 25, U.S. weekly jobless claims were at 362,000 or higher than consensus estimate at 335,000.
• Last night U.S. equity market tumbled. DJI and S&P 500 dropped more than 1%, while Nasdaq Composite downed 0.4%.
Domestic Market Update
• The 10 year Indo GB yield rose 2 bps to 6.26% on Thursday (09/30/21) yet remained within our forecast range of 6.20%-6.30% so far.
• However the benchmark government bond yield has risen by 10 bps in a week.
• 5 year Indo CDS declined to below 82 bps while rupiah depreciated hitting to IDR 14,313/USD.
• Indonesia manufacturing activity expanded in September-21 as indicated by rising PMI manufacturing to 52.2.
• Manufacturing activity has come back after contracting for two consecutive months during the implementation of tighter social restriction in July and August 2021.
Market Projection
• Today Statistics Indonesia would release inflation data. We expect inflationary pressure to remain low at +0.02% MoM/+1.67% YoY in September-21.
• We expect the 10 year Indo GB yield to decline, yet to remain moving within range of 6.20% - 6.30% today.
• Attractive Indo GB series to be traded today : FR0086, FR0090, FR0064, FR0071, FR0078, FR0082, FR0087, FR0091, FR0088, FR0083 and FR0062.
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