Global Market Update
• Yield on UST bonds retreated on Monday (04/25/22). The benchmark 10- year UST yield fell 8 bps to 2.82% to start this week.
• Yield on US government bonds dropped 3-10 bps along the curve.
• The ongoing concern of Covid-19 breakout in China has triggered the yield decline.
• Yield rose previously after Fed’s Chair Powell said that taming inflation is absolutely essential and the Fed is now open up to possibility of 50 bps FFR hike in May-22.
• US equity rebounded to start this week. Dow Jones Industrial rose 0.70%, S&P 500 was up 0.57% and Nasdaq Composite jumped 1.29%.
Domestic Market Update
• Yield on 10-year Indo rose 5 bps and finally hit above 7.00% on Monday (04/25/22).
• Along with the increase in government bond yield, IDR weakened against USD to IDR 14.458/USD yesterday (vs IDR14,357/USD last week).
• Risk premium which is reflected by the 5-year Indo CDS increased to 116.35 bps from 104.65 bps previously.
• The government has issued bonds worth of IDR306.4tn until April 13, 2022, which consists of: 1) IDR228tn denominated in rupiah and IDR18.4tn denominated in foreign currencies.
• We see the prospect of issuance of government bonds this year will be lower in line with the government's policy to use SAL and commitment to reduce issuance by IDR100tn.
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 6.95-7.05% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0086, FR0090, FR0078, FR0052, FR0087, FR0091.
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