Global Market Update
• The 10-year UST yield continue to increase after Fed’s Chair Powell signaled 50 bps rate hike is likely in May-22.
• Majority of benchmark UST yield was up by 4-9 bps along the curve on Thursday (04/22/22). The 10-year UST yield hit 2.92%
• Yields on shorter maturity UST notes jumped higher than its longer term.
• Wall Street fell on the backdrop of rising bond yield. Nasdaq Composite suffer the most from UST yield spike.
• All the 3 equity indices in Wall Street fell more than 1% yesterday.
• On the data front, US initial jobless claims came with slightly higher figure. At 184,000 for the week ending April 16.
• Meanwhile at the same time investors also monitoring the development between Russia & Ukraine.
Domestic Market Update
• Yield on 10-year Indo stabilized at 6.95% on Thursday (04/20/22).
• The IDR strengthened against USD and was closed at IDR 14.343/USD yesterday (vs IDR14,357/USD in the previous day).
• Risk premium which is reflected by the 5-year Indo CDS increased to 100.24 bps from 91.49 bps previously.
• Based on the Indonesian banking survey, outstanding loans are expected to grow by 9.3% in FY22F, higher than the previous estimate of 8.7% and 5.2% in FY21.
• We think credit disbursement will gradually pick up in line with solid economic conditions, accommodative monetary policy, adequate banking liquidity and maintained credit risk.
• We are optimistic that these four things will boost both supply and demand for bank's credit.
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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