Global Market Update
• Yield on the benchmark 10-year UST yield slightly increased to 3.52% yesterday.
• US stock market reported gain on the first trading day of the week. The DJI was up by 0.76%; S&P 500 rose 1.18% and Nasdaq Composite jumped 2.01%.
• BoJ kept its monetary policy unchanged based on the Monetary Policy Meeting Minutes.
• BoJ expects the economy to grow 1.9% in FY22E or lower than previous forecast of 2.0% citing sluggish external demand and high commodity prices.
• Meanwhile for FY23F outlook, BoJ slashed its output prospect to 1.7% from 1.9%, whereas, inflation is expected fall back to below 2% this year.
• BoJ remains seeing the global slowdown to dampen Japanese economy and thus reiterated it would take extra easing measures if needed.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) moved flattish at 6.61% before Chinese New Year Holiday.
• The IDR strengthened against USD and was closed at IDR15,075/USD last week (vs IDR 15,104/USD previous day).
• On the other hand, the 5-year Indo CDS slightly decreased to 86.65 bps and consistently below 90 bps.
• Inflows from foreign investors helped yield on government bond to lower. Bank Indonesia reported non-residents net bought SBN amounting to IDR14.5tn during 16-19 Jan 2023.
• In early 2023, foreign investors have net bought SBN of IDR36.33tn in contrast to equity sell off amounting IDR7.94tn.
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 : FR0063, FR0070, FR0077, FR0040, FR0047, FR0064, FR0085, FR0073, FR0054.
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