Company Update

06 Juli 2022

Fixed Income Report July 6, 2022

Global Market Update
• US financial market was reopened on Tuesday (07/05/22) after commemorating Independence Day to start this week.
• UST note yield continued to fall. The benchmark 10-year UST note yield declined 7 bps to 2.81%.
• Yields on US government bond are now well off their highs as market participants weigh on the recession probability.
• The shifting towards safe haven assets such as government bond also triggered USD value to spike depreciating EM currencies.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 4 bps 7.30% on Tuesday (07/05/22).
• The IDR weakened against USD and was closed at IDR14,994 yesterday vs IDR14,972 on the previous day.
• Indonesia’s risk premium 5-year CDS was closed still above 140 bps yesterday.
• The government has issued 7 series of SUN with an awarded value of IDR13.80tn and incoming bids of IDR25.98tn on Tuesday (05/07/22).
• Despite setting the indicative target lower from IDR20-30 trillion to IDR15-22.5 trillion, investors appetite is declining as reflected by lower bids in yesterday's auction (vs. IDR35.06 trillion in the previous auction).
• This reflects that investors tend to wait and see as global risks looming over the economy.
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 7.25-7.45% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0081, FR0084, FR0090, FR0047, FR0052, FR0054, FR0091.
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