Global Market Update
• Yields on UST note slightly increased along the curve. The benchmark 10- year UST note yield rose 4 bps to 3.49% yesterday.
• US GDP expanded 2.9% QoQ in 4Q22, lower than previous quarter yet above consensus estimate of 2.6% QoQ based on advance reading.
• The stock market responded higher than expected economic growth positively.
• The DJI inched up 0.61%; S&P 500 increased 1.10% and Nasdaq Composite jumped 1.76%.
• Now market participants are waiting for FOMC meeting next week. Majority expect US central bank’s to deliver 25 bps rate hike in early Feb-23, after considering a bleak outlook and disinflation environment in 2H22.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 2 bps 6.66% on Thursday (01/26/23).
• The increase in benchmark government bond yield was limited by IDR appreciation and improving risk perception.
• The IDR strengthened against USD and was closed at IDR14,948/USD after previously closed at IDR14,965/USD.
• Indonesia’s 5-year CDS was consistently below 90 bps recently and closed at 85.56 bps.
• After experiencing a downtrend since earlier this year, yield on the benchmark government bond started to normalize.
• A slight increase in yield is likely going forward, as market participants will also look up on US monetary policy.
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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