Global Market Update
• The benchmark 10-year UST note yield increased by 7 bps to 3.11 on Monday (08/29/22).
• Meanwhile the benchmark 2-year UST note yield rose by 3 bps to 3.43% at the same time.
• The spread between 2/10-year UST note yield narrowed to -32 bps from previously -36 bps.
• US stock indices continued to decline. DJI dropped 0.57%; S&P 500 fell 0.67% whilst Nasdaq Composite lost 1.02%.
• US financial markets continued to fall after Fed’s Chair Powell made a statement on future policy path at annual Jackson Hole Symposium last week.
• Powell said higher interest rate is needed to tame inflation and become CB priority although it would cost pain to households and businesses.
• Furthermore, Powell stated that failure to restore price stability would mean far greater pain.
• US inflation gauge PCE index increased by 6.3% YoY in Jul-22 (vs 6.8% YoY in Jul-22).
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) rose by 10 bps to 7.15% on Monday (08/29/22).
• The IDR weakened against USD and was closed at IDR14,898/USD on Monday (vs IDR14,818/USD on Friday).
• Indonesia’s 5-year CDS increased to 109.21 bps on Monday (vs 103.52 bps on Friday).
• Government will conduct SUN auction on Tuesday (08/30/22) with the indicative target set at IDR19-28.5tn.
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 7.10-7.30% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0042, FR0047, FR0052, FR0085, FR0091 and FR0096.
Disclaimer On
