Company Update

06 Februari 2023

Fixed Income Report February 6, 2023

Global Market Update
• Yields on the benchmark UST note increased along the curve on the last trading day of previous week.
• The benchmark 10-year yield rose 13 bps to 3.53%, while the shorter benchmark of 2-year yield increased 18 bps and closed at 4.29% at the same time.
• US stock indices fell in response to rising yield. The S&P 500 and Nasdaq Composite reverting previous gain after falling 1.04% and 1.59% respectivelyon Friday (02/03/23).
• US unemployment rate fell to 3.4% in Jan-23 after Non-Farm Payrolls added 517k jobs beating consensus estimate of 185k.
• Stronger than expected economic data may reaffirm Fed to continue hiking the policy rates as room for high inflation to remain linger.

Domestic Market Update
• Yield on the benchmark 10-year (FR0096) fell 4 bps to 6.53% on Friday (02/03/23).
• The government benchmark yield continued to move lower recently in response to lowering global government bond yields.
• The IDR weakened against USD and was closed at IDR14,894/USD after previously closed at IDR14,888/USD.
• Indonesia’s 5-year CDS stayed below 80 bps (78.91 bps) despite the IDR depreciation against USD.
• Foreign inflows in SBN market continued as BI reported non-residents net bought SBN of IDR5.42tn from 30 January – 2 February 2023.
• Continuous foreign inflows in SBN market also support government bond price recently.
• Market also awaits for Indonesia’s 4Q22 GDP data release today. We expect Indonesia’s economic output to expand 4.96% YoY in 4Q22 bringing FY22 growth rate at 5.29% YoY.

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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