Global Market Update
• The benchmark 10-year UST note yield rose by 10 bps to 2.98% on Friday (08/19/22).
• Meanwhile the benchmark 2-year UST note yield also increased by 4 bps to 3.24% at the same time.
• Albeit the increase in both short & long term rates, spread between 2/10-year UST note yield narrowed to -26 bps from previously -32 bps.
• US stock indices posted a decline on the last trading day of previous week. DJI fell 0.86%, whereas S&P 500 and Nasdaq Composite dropped by 1.29% and 2.01% respectively.
• US initial jobless claims continued to decrease. As of Aug 13, 2022 initial jobless claims edged down 2,000.
• However US existing home sales contracted by 5.9% MoM in Jul-22 to 4.81mn.
• Fed’s minutes of meeting showed that US CB wont likely to pull back the interest rate hikes until inflation could be brought back at 2% level even if it means to affect labor market and output growth.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) rose 5 bps to 7.08% on Friday (08/19/22).
• The IDR weakened against USD and was closed at IDR14,838/USD on Friday (vs IDR14,833/USD on Thursday).
• Indonesia’s 5-year CDS also increased to 109.01 bps on Friday (vs 103.03 bps on Thursday).
• Indonesia's current account balance booked a surplus of USD3.9 billion (1.1% of GDP) in 2Q22, a significant increase compared to 1Q22 of USD0.4 billion (0.1% of GDP).
• The current account surplus was supported by the goods trade balance which recorded a surplus of USD16.8 billion in 2Q22 which exceeded the increase in services and primary income deficits.
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, FR0044, FR0042, FR0052, FR0085 and FR0091.
Disclaimer On
