Global Market Update
• Yields on the benchmark UST note declined along the curve yesterday after increasing on the previous day.
• The benchmark 10-year yield increased 6 bps to 3.62%, while the shorter benchmark of 2-year yield dropped 4 bps to 4.43%.
• Despite having lower government bond yields, US stock indices recorded a decline.
• The DJI fell 0.61%, while at the same time S&P 500 and Nasdaq Composite dropped 1.11% and 1.68% respectively.
• Market will continue to pay attention on key several data release particularly job and inflation provide some insights on the future monetary policy.
• In spite of slowing the pace of interest rate hike during Feb-23 FOMC meeting, Fed still signaling for further policy rate hike and will hold it for quite long time in order to ensure inflation is back to the desired level of 2%.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) decreased 7 bps to 6.63% on Wednesday (02/08/23).
• The government benchmark yield decreased as IDR strengthened while CDS was relatively stable.
• The IDR strengthened against USD and was closed at IDR15,096/USD after previously moving below IDR15,148/USD on the previous day.
• Indonesia’s 5-year CDS also slightly fell to 85.59 bps from previously at 86.61 bps.
• Bank Indonesia reported consumer confidence index climbed to 123 in Jan-23 from 119.9 in Dec-22 marking the highest level since Aug-22.
• The increase in consumer confidence was driven by improving sentiment as inflationary pressure is easing gradually.
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 6.60-6.80% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR040, FR0078, FR0085, FR0054, FR0096, FR0045, FR0050.
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