Global Market Update
• Yields on the US treasury notes fell along the curve last Friday (03/31/2023).
• The short-term yield of 2-year notes declined 9 bps and closed at 4.03%. Whereas the benchmark 10-year notes fell 8 bps to 3.47%.
• Sentiments improved significantly after First Citizens is reported to agree to buy SVB assets of USD72bn firming confidence that banking crisis would be contained properly.
• US stock market responded positively with all benchmark indices jumped more than 1% on Friday.
• Furthermore, Nasdaq Composite also led the gain with 3.85% appreciation last week.
• Market participants expect Fed would raise another 25 bps with 55% probability in May-23.
• However, US monetary authority is expected to cut rate in Jun-23 FOMC meeting to bring back FFR target at 475-500 bps indicating 25 bps cut with 43.8% probability.
Domestic Market Update
• The domestic LCY government bonds were traded up on Friday (03/31/23).
• Yield on the benchmark 10-year (FR0096) fell 3 bps to 6.77% on the last trading day.
• The IDR strengthened against USD and finally closed below 15,000/USD hitting IDR14,996/USD.
• Indonesia’s 5-year CDS has also finally dropped to below 100 bps again and currently stood at 96.47 bps.
• Bank Indonesia reported there was a foreign portfolio inflows to SBN market worth of IDR8.37tn during 27-30 March 2023.
• Indonesia’s S&P manufacturing PMI in Mar-23 also expanded to 51.9 indicating a strong factory data despite challenging global macro backdrop.
• Furthermore, consensus also expect the annual rate of inflation would be at 5.3% YoY in Mar-23, below previous month of 5.47% YoY.
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 6.75-6.95% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0081, FR0085, FR0072, FR0076.
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