Company Update

29 Juli 2022

Fixed Income Report July 29, 2022

Global Market Update
• US GDP shrank by 0.9% in 2Q22 according to NBER. This marked the second straight quarter of US recording a negative GDP.
• Following the data release, majority of UST note yield fell. The benchmark 10-year UST note yield declined by 12 bps to 2.67% on Thursday (07/28/22).
• At the same time, the 2-year UST note yield also dropped by 13 bps and was closed at 2.87%.
• Spread between 2/10-year UST note yield remained in a negative territory indicating an inversion.
• Yields on the safer asset tended to decline recently as market participants assessed the likelihood of US economy falling into recession.
• Furthermore, Fed also decided to raise FFR by 75 bps on July-22 FOMC meeting in-line market expectation.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) fell 11 bps to 7.24% on Thursday (07/28/22).
• Falling the benchmark Indo GB yield was also followed by strengthening IDR and declining risk premium.
• IDR strengthened against USD and was closed at IDR14,922/USD yesterday (vs IDR15,010/USD on Wednesday).
• Indonesia 5-year CDS also declined to 112.22 bps yesterday (vs 126.47 bps on Wednesday).
• Markets now await for domestic CPI and 2Q22 GDP data release next week.
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 7.20-7.30% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0056, FR0078, FR0052, FR0073, FR0091.
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