Company Update

24 Juni 2022

Fixed Income Report June 24, 2022

Global Market Update
• Yield on the benchmark 10-year UST note fell 7 bps to 3.09% on Thursday (06/23/22). UST note yields declined 1-8 bps along the curve yesterday.
• The decline in government bond yields also occur in the Eurozone..
• Germany benchmark 10-year government bond yield dropped 21 bps, while yield on UK 10-year government bond fell 19 bps yesterday.
• US major stock indices were closed higher. DJI was up 0.64% while S&P 500 and Nasdaq Composite rose 0.95% and 1.62% respectively.
• Despite the drop in government bond yield and positive stock performance yesterday, risks are still skewed to the downside given the geopolitical & protectionism risk remain and tightened financial condition globally.

Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) fell 7 bps to 7.39% on Thursday (06/23/22).
• The IDR strengthened against USD and was closed at IDR14,841 yesterday vs IDR14,863 in the previous day.
• However, Indonesia’s risk premium 5-year CDS is rising and was closed at 110.49 bps yesterday from 107.57 bps in the previous day.
• BI decided to hold 7-day reverse repo rate at 3.5% in line with our forecast and consensus estimate.
• BI maintain domestic economic growth projection at 4.5-5.3% for FY22F despite rising external risk.
• Government also recorded a budget surplus of IDR132.2tn (0.74% GDP) in May-22 as the economy continue to recover.

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 : FR0063, FR0081, FR0084, FR0090, FR0047, FR0052, FR0054, FR0091.

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