Global Market Update
• US government bond market started this week with a declining yield after increasing last week
• The benchmark 10-year yield fell 3 bps to 3.92% on Monday (02/27/23). Yet the benchmark long-term rate has increased 10 bps on a weekly basis.
• US major stock indices increased as government bond yield decreased. The DJI was up 0.22%; S&P 500 increased 0.31% while Nasdaq Composite lead the gain of 0.63%.
• Euro liquidity indicators started to show a slowing growth. The M3 money supply grew 3.5% in Jan-23.
• In addition loan to companies and households grew by 6.1% YoY and 3.6% YoY respectively in Jan-23.
• Such a growth figure was lower than previous month result when loan to companies expanded 6.3% YoY and loans to household rose 3.8% YoY.
Domestic Market Update
• Domestic IDR denominated government bond prices weakened to start this week.
• Yield on the benchmark 10-year (FR0096) increased 8 bps to 6.85% on Monday (02/27/23).
• The IDR continued to weaken against USD and was closed at IDR15,270/USD yesterday after previously closed at IDR15,228/USD last week.
• Indonesia’s 5-year CDS stayed below 100 bps and closed at 94.54 bps yesterday.
• Market participants will look at Feb-23 inflation data release tomorrow which is expected to increase by 5.44% YoY, higher than previous month of 5.28% YoY.
• Yet, BI seems to stay with its stance that a cumulative 225 bps hike in 7-day reverse repo rate are enough to bring inflation back to desired le.
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 6.80-7.00% for today.
• Attractive Indo GB series to be traded today : FR0046, FR0070, FR0077, FR0044, FR0081, FR0086, FR0096, FR0098.
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