Global Market Update
• Yields on US government bond fell 1-4 bps along the curve on Thursday (03/31/22).
• The benchmark 10-year UST yield was closed 1 bps lower at 2.34%. However the spread between 2-10 year UST yield narrowed and US stock indexes tumbled more than 1.5%.
• US PCE as inflation indicator rose +0.6% MoM/+6.4% YoY in Feb-22, higher than previous month increase of +0.5% MoM/+6.0% YoY.
• Core PCE inflation was up +0.4% MoM/+5.4% YoY, higher than previous month yet slightly below consensus estimate at (+0.4% MoM/+5.5% YoY).
• US weekly initial jobless claims rose to 202k last week. The job figures were higher than in the previous period of 188k and consensus estimate at 197k.
• Oil price was down after US president Joe Biden said to release oil from Strategic Petroleum Reserves.
Domestic Market Update
• Yield on 10-year Indo GB was closed 1 bps lower to 6.73% on Thursday (03/31/22). The benchmark yield rose 38 bps in 1Q22.
• The IDR weakened against USD to the level of IDR14,363/USD yesterday (vs IDR14,344/USD in the previous day).
• Risk premium which is reflected by the 5-year Indo CDS also rose and was at 84.00 bps yesterday (vs 82.43 bps in the previous day).
• Indonesia's manufacturing PMI was recorded at 51.3 on Mar-22, higher than the previous month's figure of 51.2.
• Indonesia's manufacturing activity remains in an expansive condition for 7 consecutive months with economic conditions remaining solid despite being hit by the third wave of Covid-19 at the beginning of the year.
Market Projection
• Statistics Indonesia will report domestic CPI figure for Mar-22. We expect inflation to rise +0.59% MoM/+2.57% YoY las month on the back of rising several food staple prices including cooking oil.
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to keep steady within a range of 6.70-6.80% for today.
• Attractive Indo GB series to be traded today : FR0086, FR0090, FR000064, FR0078, FR0087, FR0091.
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