Global Market Update
• The U.S. treasury yield slipped following the Fed signal to taper asset purchase announced last night.
• The long term U.S. government bond yield decreased 1-3 bps along the curve.
• The Fed’s officials said that the asset purchase moderation may be soon warranted.
• The U.S. central bank also signaled rising interest rates more quickly than expected in 2020 according to 9/18 policy makers.
• The U.S. senate aimed to vote next week on rising debt ceilings and keep the government funded.
• The failure to reach debt ceiling would likely to risk the government bond to have a higher yield.
• Elsewhere in China, PBoC injected USD18.6bn to banking system due to rising risk of default from Chinese 2 nd largest property market developer.
• Evergrande faced a Thursday deadline to pay interest of its USD bonds.
• U.S. equity market soared nearly 1% in all indices.
Domestic Market Update
• The 10 year Indo GB yield declined to 6.13% on Wednesday (09/22/21) and remained within our forecast range of 6.10%-6.20% so far.
• 5 year Indo CDS moderated to 80 bps while rupiah slightly depreciated against USD to IDR 14,238/USD from previously at IDR 14,243/USD.
• Indonesia money supply (M2) grew by 6.9% YoY to IDR7.199tn in August-21 or lower than previous month growth of 8.9% YoY.
• We believe that ample liquidity in the economy would not be translated into a higher output and inflation if public activity restriction remain in place.
Market Projection
• We expect the 10 year Indo GB yield to move within range of 6.10% - 6.20% today.
• Attractive Indo GB series to be traded today : FR0086, FR0064, FR0071, FR0078 FR0082, FR0087, FR0068, FR0080, FR0072, FR0057 & FR0062.
Disclaimer
