•The 10-year U.S. treasury yield closed at 1.65% on Friday (10/22/21). Meanwhile at the same time U.S. stock market mixed. DJI rose 0.21%, S&P 500 downed 0.11% and Nasdaq Composite dropped 0.82%.

•U.S. PMI flash readings in October-21 recorded an expansion for both manufacturing and service sector.

•Markit Composite PMI Flash Oct-21 came to 57.3 (vs 55 in Sep-21). Service PMI Flash Oct-21 was at 58.2 (vs 54.0 in Sep-21) and Manufacturing PMI stood at 59.2 (vs 60.7 in Sep-21).

•Solid economic data has supported the Fed’s statement that substantial progress has been made. Therefore it’s time to start rolling back the stimulus.

•Tapering is expected to conclude in the 2H22 and followed by interest rate hikes in the 3Q22 or 4Q22 according to Fed Atlanta President Raphael Bostic, if high inflation persist.

•Markets expect the Fed to increase rate at least by Dec-22 with >75% probability and central tendency of 25 bps rate hike.

•Flash PMI figures in U.K and Europe were also reported to indicate an expansion despite the pace decelerated.

•The 10-year Indo GB closed flat to 6.05% on Friday (10/22/21). The benchmark yield was still below our forecast range of 6.10%-6.20%.

•The benchmark Indo GB yield tend to consolidate amid rising upward pressure on the GB yield globally.

•Rupiah was traded stably at IDR 14,123/USD last week. At the same time 5-year Indo CDS was also stable at 83 bps.

•It seemed that investors tend to wait and see digesting both global and domestic development.

•On the policy side, Bank Indonesia (BI) keeps the accommodative policy mix to support domestic economic growth by : 1) extending 0% DP & max 100% LTV/FTV for mortgage until Dec-22 and 2) the policy on minimum credit card payment of 5% from total outstanding and  reducing the value of fines for late credit card payments by 1% of the outstanding or a maximum of IDR 100,000 up until June-22 in order to boost credit growth.