Global Market Update
• The 10-year UST yield jumped 7 bps to 2.93% on Tuesday (04/19/22).
• Yield on US government bonds rose 6-15 bps along with the ongoing concern on inflation outlook that trigger aggressive tightening from the Fed. • US equity market rebounded last night. Nasdaq Composite lead the gain with 2.15% appreciation.
• The World Bank cuts its global GDP growth for FY22F by 90 bps from 4.1% to 3.2% amid ongoing concern of Russia-Ukraine conflict.
• After the World Bank, now it turns of the IMF to cut the growth prospect by 80 bps from previous forecast to 3.6% for FY22F.
• Russia-Ukraine conflict continue to risking global growth prospect.
• Majority of benchmark sovereign bond yield also rose following the spike of UST yield.
Domestic Market Update
• Yield on 10-year Indo stayed at 6.96% on Tuesday (04/19/22) in line with our expectation.
• The IDR strengthened against USD and was closed at IDR 14.340/USD yesterday (vs IDR14,356/USD in the previous day).
• Risk premium which is reflected by the 5-year Indo CDS decreased to 92.52 bps from 100.04 bps previously.
• Government has issued IDR2.01tn sharia securities on yesterday’s auction and will conduct a green shoe option today.
• The total incoming bids on yesterday’s auction was IDR7.54tn, significantly below previous auction of IDR18.1tn.
• Trend in UST yield spike has triggered bond price to decline and market appetite to low as investors more on wait and see mode.
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 6.90-6.70% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0086, FR0090, FR0071, FR0078, FR0087, FR0091.
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