Global Market Update
• The 10-year UST yield retreated 6 bps to 2.72% on Tuesday (04/12/22) after inflation data release.
• Yield on US government bonds fell 2-15 bps along the curve, with the short- end experiencing a steeper decline.
• US stock market continued to weaken. DJI declined 0.29% while S&P 500 and Nasdaq Composite each fell 0.34% and 0.30%.
• US headline inflation jumped 8.5% YoY in Mar-22, this figure is slightly in line with market expectation at 8.4% YoY.
• US core inflation also jumped 6.5% YoY and slightly in line with market expectation at 6.6% YoY.
• The recent jump in US government bond yields remained triggered by possibility of more aggressive Fed’s tightening.
• Russia-Ukraine geopolitical tension has heightened again. Russian President Putin stated that peace talks had stalled and were prepared to resume military aggression.
Domestic Market Update
• Yield on 10-year Indo GB increased by 4 bps to 6.88% on Tuesday (04/12/22), in line with our upper target of daily forecast range.
• The IDR slightly depreciated against USD and was closed at IDR 14.366/USD yesterday (vs IDR14,365/USD in the previous day).
• Risk premium which is reflected by the 5-year Indo CDS also rose to 87.73 bps from 85.49 bps.
• Government of Indonesia has issued IDR11.05tn of 7 series of SUN (2 bills and 5 bonds) in an auction held on Tuesday (04/12/22).
• The issuance was lower than indicative target set by the government at IDR20-30tn.
• The total incoming bids reached IDR40.28tn in yesterday's auction, lower than in previous auction at IDR41.62tn and strong investors’ appetite to shorter maturity securities.
• Given, the recent spiked in UST yield due to aggressive possibility of US monetary policy, yield of 10-yeat Indo GB also rose.
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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