Global Market Update
• Yields on the benchmark UST note continued to move upward along the curve post stronger than expected inflation data.
• The benchmark 10-year UST note yield rose 6 bps and closed at 3.81% on Wednesday (02/15/23).
• On the other hand, the benchmark 2-year UST note increased slightly by 1 bps to 4.63% at the same time.
• In spite of rising government bond yields, US stock market recorded a gain with the DJI rose 0.11%; S&P was up 0.28% and Nasdaq Composite lead all the gain with 0.92% jump.
• US retail sales report showed 3% increase on the month and much stronger than consensus expect.
• Stronger than expected data release may pointing to higher peak rate, as stronger economy may results in higher inflation.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 4 bps to 6.74% on Wednesday (02/14/23).
• The benchmark government bond yield slight increased following the IDR depreciation and global bond market movement.
• The IDR weakened against USD and closed at IDR15,206/USD yesterday vs IDR15,167/USD on the previous day.
• Indonesia’s 5-year CDS inched stayed at >90 bps and the closing position was 91.93 bps.
• Indonesia’s trade balance surplus continued for 33-straight months in Jan-23. The trade balance surplus was USD3.87bn or above consensus estimate as monthly imports performance fell more than exports.
• The drop in exports particularly driven by seasonality factors, softening commodity prices and lower volume, whereas imports decline driven by the drop in capital and raw materials imports which are related to exports product.
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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