Global Market Update
• The benchmark 10-year UST note yield was slightly unchanged and closed at 3.11% on Tuesday (08/30/22).
• Meanwhile the benchmark 2-year UST note yield rose by 1 bps to 3.44% at the same time.
• The spread between 2/10-year UST note yield slightly widened to -33 bps from previously -32 bps.
• US stock indices extended declines on Tuesday. DJI dropped 0.96%; S&P 500 fell 1.10% whilst Nasdaq Composite lost 1.12%.
• 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.
• Elsewhere, ECB policy maker is said to consider a 75 bps rate hike in Sep-22 meeting given high inflationary pressure.
• Germany inflation rate jumped 7.9% YoY in Aug-22 based on preliminary reading (vs 7.5% YoY increase in Jul-22), and was 1 bps higher than consensus estimate.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) decreased by 5 bps to 7.10% on Tuesday (08/30/22).
• The IDR strengthened against USD and was closed at IDR14,843/USD on Tuesday (vs IDR14,898/USD on Monday).
• Indonesia’s 5-year CDS decreased to 108.05 bps on Tuesday (vs 109.20 bps on Monday).
• Government has conducted SUN auction on Tuesday. The incoming bids totaled IDR47.25tn with the awarded value of IDR19tn.
• The incoming bids value and nominal awarded were lower than in the previous auction when incoming bids hit IDR72.16tn, whilst, the awarded value reached IDR21tn.
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
