Global Market Update
• US treasury notes yield recorded an increase along the curve starting this week as markets welcoming earnings season (04/17/23).
• The benchmark 10-year UST note yield increased 8 bps to 3.60% on Monday.
• Meanwhile, the benchmark 2-year UST note yield jumped 10 bps and climbed to 4.20%, bringing 60 bps inversion.
• US equity indices started the week with appreciation. The DJI, S&P 500 and Nasdaq Composite were up 0.30%.
• Markets now betting 84.1% probability of 25 bps FFR hike in May-23 FOMC meeting.
• China’s industrial production expanded 3.9% YoY in Mar-23, marking the highest pace since 4Q22.
• The RBA maintained the cash rate steady at 3.6% in its Apr-23 meeting, which came in-line with expectation pointing the first pause since May-23.
Domestic Market Update
• The domestic LCY government bonds were traded lower on Monday (04/17/23).
• Yield on the benchmark 10-year (FR0096) increased 1 bps to 6.64% on Friday last week.
• After a series of appreciation, the IDR finally depreciated against USD and closed at 14,794/USD yesterday.
• The Sovereign Credit Risk indicator reflected by 5-year CDS also weakened and approaching 90 bps at the same time.
• Indonesia’s trade balance surplus came lower than expected with a surplus of USD2.91bn (vs ~USD4bn of consensus estimate).
• Both exports and imports contracted on an annual basis, yet still increasing from the previous month driven by seasonality factors.
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 : FR0070, FR0077, FR0081, FR0084, FR0086, FR0045.
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