Global Market Update
• Yield on the benchmark 10-year UST note increased 2 bps to 3.04% on Thursday (06/09/22).
• Eurozone government bond yields also spiked on the back of ECB plan to tighten its monetary policy.
• UK and Germany 10-year benchmark rates rose by 8 bps yesterday.
• ECB would soon to end bond buying program and embarking interest rate hikes.
• ECB is expected to raise benchmark policy rates 2x this summer to fight against multiyear highs elevated inflation.
• Markets see the end of ZLB rates and easy money is about to begin and asking higher yield in the bond market.
• US major stock indexes tumbled with DJI dropped 1.94% while S&P 500 and Nasdaq Composite fell 2.38% and 2.74% respectively.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) rose 3 bps to 7.18% on Thursday (06/09/22).
• The IDR weakened against USD and was closed at IDR14,567 yesterday (vs IDR14,492) previously.
• Indonesia risk premium 5-year CDS also rose was closed at 92.95 bps from 90.99 bps in the previous day.
• The average propensity to consumer of Indonesian consumers has increased to 74.3% in May-22 from 73.9% in the previous month.
• The increase in monthly average propensity to consume was in line with the increase in consumer confidence and the decline in saving to income ratio from 16.4% to 16.0% in May-22.
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 7.05-7.25% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0084, FR0090, FR0078, FR0085, FR0054, FR0091.
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