Global Market Update
• Yields on the benchmark UST note increased along the curve on Thursday (02/10/23).
• The benchmark 10-year and 2-year yields rose 6 bps to 3.67%, and 4.48% at the same time.
• US stock indices fell yesterday. The DJI fell 0.73%, whereas S&P 500 and Nasdaq Composite dropped 0.88% and 1.02% respectively.
• Some of market participants now expect that Fed would raise the interest rate to 6% triggering yield to spike.
• In Europe, Germany reported that the preliminary reading of Jan-23 annual inflation hit 8.7% YoY, lower than consensus estimate of 8.9% YoY.
• Elsewhere in UK, The BoE members have voted a 50 bps hike to 4.0% during Feb-23 meeting by a majority of voters 7-2.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) fell 3 bps to 6.60% on Thursday (02/09/23).
• The benchmark government bond yield declined amidst stable IDR and Indonesia’s CDS.
• The IDR moved flattish and closed at IDR15,097/USD yesterday vs IDR15,096/USD on the previous day.
• Indonesia’s 5-year CDS stayed below 90 bps and was closed at 86.44 bps yesterday.
• On the data front, Bank Indonesia (BI) reported domestic retail sales expanded 0.7% YoY in Dec-22, marking a lower pace than the previous month of 1.3% YoY.
• Indonesia’s retail sales grew positively in the last 15 consecutive months, yet the Dec-22 figure was the softest pace since Sep-19.
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 6.60-6.80% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR040, FR0078, FR0085, FR0054, FR0096, FR0045, FR0050.
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