Global Market Update
• Yields on US treasury note fell last week after economic data release signaling inflation may be cooling down.
• The benchmark 10-year UST note yield fell to 3.56% on Friday last week (01/06/22).
• US stock market recorded a weekly gain on the first week of 2023. S&P 500 and Dow Jones rose ~1.5% while Nasdaq Composite increased 1%.
• Some economic data release also signaled the possibility of further slowing in inflation.
• US non-farm payrolls increased 223,000 in Dec-22, higher than Dow Jones estimate of 200,000.
• On the other hand, average hourly wage increased 0.3% MoM/4.6% YoY or lower than estimate of 0.4% MoM/5.0% YoY.
Domestic Market Update
• The yield on the benchmark of 10-year Indo GB (FR0096) decreased 2 bps to 6.96% on Friday (01/06/22)
• Risk perception as indicated by 5-year CDS was closed below 100 bps & was flat at 96 bps.
• The IDR weakened against USD and was closed at IDR 15,633/USD Friday (vs IDR 15,617/USD on the previous day).
• BI reported that foreign investors booked a net sell of IDR2.91tn in the equity market while net bought government bond of IDR6.68tn in the first week of 2023.
• We believe this could reflect an early year rebalancing of investors who lean towards safer and cheaper assets.
• In addition, Indonesia’s FX reserves jumped USD3.2bn to USD137.2bn in Dec- 22 on the back of global bond issuance and tax and receipts performance improvement.
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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