Global Market Update
• Yields on the benchmark UST note slipped along the curve on Thursday (02/23/23).
• The benchmark 10-year yield declined 3 bps to 3.89%, while the shorter benchmark of 2-year yield was flattish.
• Previously US government bond yields hit the highest level since Nov-22 as markets continue to assess Fed’s hike probability.
• US stock indices recorded a gain yesterday. The DJI and S&P 500 each increased 0.33% and 0.53%, while Nasdaq Composite rose 0.72%.
• US tech stock index again showed a more sensitive movement driven by the government bond yields change.
• Japan annual inflation rate hit 4.3% in Jan-23 hotter than prior month 4.0% and recorded the highest pace since Dec-81.
• Japan has experienced an imported inflation phenomenon is commodity prices remain high above pre-pandemic level JPY depreciation against USD.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 2 bps to 6.77% on Thursday (02/23/23).
• Yield on the benchmark government bond slightly increased despite IDR strengthening and improving risk sentiment.
• The IDR strengthened against USD and was closed at IDR15,192/USD after previously closed at IDR15,200/USD.
• Indonesia’s 5-year CDS fell below 100 bps and closed at 97.81 bps yesterday.
• Increasing volatility to remain the key risks for global and domestic financial market.
• Despite recent uptick in volatility in the global market, rising yields on IDR denominated government bond is still considered manageable.
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 6.70-6.90% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0046, FR0070, FR0077, FR0081, FR0096.
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