Company Update

15 Juli 2022

Fixed Income Report July 15, 2022

Global Market Update
• The benchmark 10-year UST note yield rose 2 bps to 2.96% on Thursday (07/14/22).
• Meanwhile the benchmark for shorter rate 2-year UST note yield fell 2 bps to 3.14%
• The spread between 2-10 year UST note yield widened in negative territory to -18 bps reaching the biggest level since 2000.
• Spread between short and long maturity UST note widened in negative territory after US reported an increase of annual CPI by 9.1% in Jun-22.
• In addition US PPI recorded an increase of 11.3% YoY that still signal possibly higher inflation going forward.
• The jump in US inflation is expected to cause the Fed to raise FFR higher by 100 bps in Jul-22.
• Given the yield curve inversion, market participants now expect that Fed would likely to increase FFR by 100 bps on Jul-22 meeting.
• US stock market tumbled. DJI fell 0.46% while S&P 500 was down by 0.30% last night.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) jumped 12 bps to 7.34% on Thursday (07/14/22).
• The IDR was closed at IDR15,020/USD finally hitting a 15,000/USD level.
• Indonesia’s risk premium 5-year CDS increased to 160 bps yesterday. Indonesia’s risk premium continued to rise recently
• Market expect Jun-22 trade surplus to continue as government decided to allow CPO exports.
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 7.20-7.40% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0056, FR0078, FR0052, FR0073, FR0091.
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