Global Market Update
• Yield curve inversion in US worsened as the short term rates continued to rise, whereas the long term government bond yield decreased.
• The benchmark 10-year UST note yield inched lower by 2 bps and closed at 3.71% starting this week (02/13/23).
• US stock market recorded a gain in the beginning of this week. The DJI, S&P 500 and Nasdaq Composite jumped more than 1% ahead of inflation data release.
• Nasdaq Composite as the proxy for US tech-stock lead the gain with 1.48% appreciation.
• Markets await for US Jan-23 inflation data that is expected to increase 6.2% YoY. Consensus expects lower annual inflation rate. Previously in Dec-22, US CPI increased 6.5% YoY.
• Despite the Fed’s official to remain hawkish, the expectation of US economy to experience disinflation was responded positively.
• Based on preliminary readings of Japan GDP in 4Q22, Japanese economy reported a 0.2% QoQ increas e, or lower than cons ens us estimate of 0.5% YoY.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 7 bps to 6.72% starting this week.
• The benchmark government bond yield increased following IDR depreciation and weakening risk perception.
• The IDR weakened against USD and closed at IDR15,195/USD yesterday vs IDR15,134/USD on the previous day.
• Indonesia’s 5-year CDS finally hit 90 bps and was at 93.2 bps at the same time. .
• Government of Indonesia will conduct regular auction every Tuesday by offering 7 series ofSUN targeting IDR23-34.5tn
• During highly volatile market, investors tend to wait and see and thus will also influencemarketappetite.
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 6.71-7.00% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0046, FR0070, FR0077, FR0081, FR0052, FR0096, FR0067.
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