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RESEARCH

Company Update

16 Juni 2022

Fixed Income Report June 16, 2022

Global Market Update
• The Fed raised FFR by 75 bps to 1.50-1.75% on two days meeting 14-15 June 2022 as markets have already expected.
• Yields on US government bond declined 6-25 bps along the curve on Wednesday (06/15/22).
• The benchmark 10-year UST yield dropped 19 bps to 3.29% after hitting a decade high level.
• US major stock indices rebound. DJI was up 1.00%; S&P rose 1.46% and Nasdaq Composite increased 2.50%.
• Going forward, the Fed also consider 50-75 bps rate hikes in the next meeting in order to bring inflation rate at a healthy level of 2%.
• Markets also expect more hawkish policy from BoE. UK’s CB is set to raise benchmark policy rate for 5th since Dec-21. Most of investors expect another 25 bps rate hike

Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was flat at 7.40% on Wednesday (06/15/22).
• The IDR weakened against USD and was closed at IDR14,745 yesterday (vs IDR14,699) in the previous day.
• Indonesia risk premium 5-year CDS declined to 105.16 bps from previously at 109.92 bps.
• Statistics Indonesia reported Indonesia’s exports rose 27% YoY while imports increased 30.74% YoY making a trade balance surplus of USD2.9bn in May-22.
• Exports value dropped 21.3% MoM and was dragged down by CPO exports ban, yet high commodity prices helped to maintain trade surplus for 25 straight months.

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 7.30-7.50% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0084, FR0090, FR0078, FR0085, FR0054, FR0091.

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