Global Market Update
• Yield on the benchmark 10-year UST note fell 4 bps to 3.69% on Wednesday (01/04/22). Meanwhile yield on the 2-year UST note was slightly unchanged at 4.36% at the same time.
• Despite weak manufacturing data, US stock market was traded up. The DJI rose 0.4%; S&P 500 increased 0.75% and Nasdaq Composite was up 0.69%.
• The ISM manufacturing PMI for US fell to 48.4 in Dec-22, marking a two consecutive months of contraction.
• However, US ISM manufacturing PMI continued to slowing since Aug-22 pointing a weakening economic activity.
• It seems that the period of expansion which lead to high inflation is now turning to a slowdown as US monetary policy stance is tightening.
Domestic Market Update
• The yield on the benchmark of 10-year Indo GB (FR0096) decreased 4 bps to 7.02% on Wednesday (01/04/22)
• Risk perception as indicated by 5-year CDS was closed below 100 bps & was flat at 97 bps.
• The IDR strengthened against USD and was closed at IDR 15,588/USD yesterday.
• State revenue for the 2022 budget reached IDR 2,624.4 trillion or achieving 115.9% target set in Presidential Decree No.98/2022 of IDR 2,266.2 trillion.
• Higher than target state revenue was driven by achievements from all sources of income: 1) taxes (115.6% target); 2) customs & excise (106.3% target) and 3) PNBP (122.2%) which shows a solid Indonesian economy throughout 2022 amidst persistently high commodity prices.
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 6.85-7.05% for today.
• Attractive Indo GB series to be traded today : FR0077, FR0037, FR0047, FR0052, FR0054, FR0096.
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