Company Update

11 Agustus 2022

Fixed Income Report August 11, 2022

Global Market Update
• The benchmark 10-year UST note yield was slightly unchanged and closed at 2.79% on Wednesday (08/10/22).
• Meanwhile the benchmark 2-year UST note yield declined 5 bps to 3.22% at the same time.
• Yield curve remained inverted with the spread between 2/10-year UST note stood at -43 bps.
• The move UST note yield came after US CPI data release. Inflation in US increased 8.5% YoY in Jul-22.
• Actual inflation figure was lower than Jun-22 and consensus estimate at 9.1% YoY & 8.7% YoY.
• US stock indices jumped significantly. DJI rose 1.63%; S&P 500 was up 2.13% & Nasdaq Composite gained 2.89%.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was slightly unchanged and closed at 7.08% on Tuesday (08/10/22).
• The IDR weakened against USD and was closed at IDR14,871/USD on Wednesday (vs IDR14,853/USD on Tuesday).
• Indonesia’s 5-year CDS recorded a decline to 108.99 bps on Wednesday (vs 112.07 bps on Tuesday).
• The pressures on government bond continued to ease as US inflation and Fed’s action have been already priced in.
• The foreign ownership of SBN increased by IDR10.72tn to IDR761.96tn indicating an inflows.
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 7.00-7.20% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0037, FR0090, FR0052, FR0085, FR0073, FR0054 and FR0091.
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