Company Update

03 Februari 2023

Fixed Income Report February 3, 2023

Global Market Update
• Yields on the benchmark UST note continued to fall despite the drop was relatively limited yesterday (02/02/23).
• The benchmark 10-year yield declined 2 bps to 3.40%, while the shorter benchmark of 2-year yield was 1 bps lower and closed at 4.10% at the same time.
• US stock indices were closed mixed yesterday. The DJI fell 0.11%, whereas S&P 500 and Nasdaq Composite jumped 1.47% and 3.25% respectively.
• US tech stocks continued to rebound in early 2023, reverting last year trend along with the decline in government bond yield.
• Markets are still expecting that US disinflation environment to continue due to weak demand and thus favoring fixed income asset valuation.
• Euro Zone government bond yields edged lower in response to Fed’s chair Powell comment ahead of ECB meeting.
• ECB will announce its policy rate today and a 50 bps rate hike is widely expected. Furthermore, markets also await ECB guidance and detailed parameters for central bank to reduce its bond holding.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) fell 7 bps to 6.57% on Thursday (02/02/23).
• The government benchmark yield continued to move lower after Fed’s policy response in Feb-23 was broadly in-line with market expectation.
• The IDR weakened against USD and was closed at IDR14,888/USD after previously closed at IDR14,975/USD.
• Indonesia’s 5-year CDS for the first time in 2023 dropping below 80 bps and was closed at 78.28 bps.
• Besides the foreign inflows in SBN market amounting at IDR49.7tn in Jan-23, the average daily outright trading volume also increased from IDR16.5tn in Dec- 22 to IDR28.5tn in Jan-23
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 6.55-6.75% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR040, FR0078, FR0085, FR0054, FR0096, FR0045, FR0050.
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