Global Market Update
• Yields on UST note moved flattish yesterday as markets assess companies earnings.
• The benchmark 10-year UST note yield stayed at 3.45% on Wednesday (01/25/23).
• On the other hand, US stock indices were closed mixed. The DJI was up marginally by 0.03%, while S&P 500 and Nasdaq Composite fell 0.02% and 0.18% respectively.
• Bank of Canada raised the benchmark policy rate by 25 bps to 4.5% in the first meeting of Jan-23. The move came in-line with market expectation.
• Australia reported the inflation rate increased 7.8% YoY in 4Q22 well above previous month of 7.3% YoY and above consensus estimate at 7.5% YoY.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 3 bps 6.64% on Wednesday (01/25/23).
• A slight increase on the benchmark government bond yield was in-line with IDR depreciation.
• The IDR weakened against USD and was closed at IDR14,965/USD after previously closed at IDR14,888/USD.
• Indonesia’s CDS stabilize below 90 bps recently and supporting domestic financial market.
• Domestic bond market activity has improved with average daily outright trading value hitting IDR19.5tn through 17 January 2023, increasing from previous month of IDR13.99tn.
• The increase in transaction value and volume buoyed by global bond yield decline trend recently and portfolio inflows.
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, FR0081, FR0040, FR0047, FR0064, FR0085, FR0073, FR0054.
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