Global Market Update
• The 10-year UST yield finally recorded a decline by 9 bps to 2.84% on Wednesday (04/20/22).
• Yield on US government bonds dropped 1-11 bps along the curve.
• US equity market was mixed on Wednesday’s trading. DJI was up 0.71% meanwhile S&P 500 and Nasdaq Composite each fell 0.06% and 1.22%.
• On the data front, existing home sales in Mar-22 were 4.5% lower than the same period in 2021
• The international financial institution already cut the global growth prospect due to increasing inflation and heightened geopolitical tension.
• Russia-Ukraine conflict continue to risking global growth prospect.
• Recently US is said preparing massive new arm’s package for Ukraine.
• Majority of benchmark emerging sovereign bond yield also rose yesterday.
Domestic Market Update
• Yield on 10-year Indo increased 1 bps 6.97% on Wednesday (04/20/22) in line with our expectation.
• The IDR weakened against USD and was closed at IDR 14.357/USD yesterday (vs IDR14,340/USD in the previous day).
• Risk premium which is reflected by the 5-year Indo CDS decreased to 91.49 bps from 92.52 bps previously.
• Up to 1Q22, the tax revenue has reached IDR322.36 trillion or grew 41.36% YoY.
• With this amount, 25.49% of the 2022 State Budget target has been achieved.
• We see that the government is quite optimistic that the tax revenue target in FY22E can be achieved in line with the trend of economic recovery.
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 6.90-7.00% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0086, FR0090, FR0071, FR0078, FR0087, FR0091.
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