Global Market Update
• US treasury notes yield recorded an increase of 1-5 bps along the curve on Thursday (04/13/23).
• The benchmark 10-year UST note yield increased 6 bps to 3.45% yesterday. Meanwhile, the benchmark 2-year UST note yield slightly flattish
• Despite the decline in government bond price, US stock price indices seemed to move in opposite.
• Most of the benchmark for equity indices jumped more than 1%. The DJI closed 1.14% higher. The S&P increased 1.33% whereas the Nasdaq Composite jumped 1.99%.
• US data release again showed that the economy faces the slowing down in inflation.
• US monthly PPI declined 0.5% MoM marking the largest de cline since Apr-20. This also firming Mar-23 annual inflation rate data that came lower than expected.
• In addition, US tight labor market also showing a sign of easing. Initial jobless claims that ended in April 8, 2023 hit 239k.
• Initial jobless claims was higher in Mar-23 compared to previous month of only 228k and beating consensus estimate of 232k.
Domestic Market Update
• The domestic LCY government bonds were traded mixed on Yesterday (04/13/23).
• Yield on the benchmark 10-year (FR0096) fell 2 bps to 6.63% yesterday.
• The IDR continued to strengthen against USD and closed at IDR 14,7460/USD.
• Domestic currency appreciation was largely driven by portfolio inflows, continued trade surplus and also backed low and stable CDS.
• Indonesia’s 5 year CDS is consistently declining and now stood below 90 bps or precisely at 88.35 bps.
• The IDR appreciation against USD coupled with lower sovereign credit risk help LCY government bond market to be less volatile.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 6.60-6.80% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0084, FR0045.
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