Global Market Update
• The 10-year UST yield jumped 8 bps to 2.79% and again hitting its highest level since Jan-19 to start this week (04/11/22).
• The fear of high inflation and aggressive monetary tightening have triggered government bond yield spike.
• US longer term rates increased 7-8 bps along the curve yesterday. Meanwhile the shorter and the belly yield rose marginally.
• US stock market tumbled amid rising UST yield. DJI and S&P 500 each fell 1.17% and 1.69%.
• US growth stocks such as in tech sector continuously showing its high sensitivity to higher interest rates with Nasdaq Composite dropping 2.18% yesterday.
• Investors focus on key inflation data that is scheduled to be released this week.
• US inflation is expected to rise 8.4% YoY in Mar-22 or higher than the previous month figure of 7.9% YoY.
Domestic Market Update
• Yield on 10-year Indo GB increased by 5 bps to 6.84% on Monday (04/11/22), in line with our upper target of daily forecast range.
• The IDR slightly depreciated against USD and was closed at IDR 14.365/USD yesterday (vs IDR14,362/USD last week).
• Risk premium which is reflected by the 5-year Indo CDS also rose to 85.49 bps (vs 82.60 bps last week).
• Bank Indonesia reported that Indonesia's retail sales grew 12.9% YoY in Feb-22 and is estimated to continue to grow 8.6% YoY in Mar-22.
• The improvement is in line with the increasing public demand during the easing of the PPKM, the sloping Covid-19 cases, and the start of preparations for the month Ramadan.
• Government is scheduled to conduct securities auction today (2 bills, 5 bonds) with the issuance target of IDR20-30tn.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to keep steady within a range of 6.80-6.90% for today.
• Attractive Indo GB series to be traded today: FR0070, FR0086, FR0090, FR000071, FR0078, FR0087, FR0091.
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