Global Market Update
• Yield on the benchmark 10-year UST note rose 6 bps to 3.14% on Friday (06/24/22).
• Yields on US government bond was up 1-6 bps along the curve last week but still posted a weekly decline of 5-20 bps along the curve.
• The University of Michigan Consumer Survey said consumers expect inflation to rise at 5.3% by the end of June-22.
• US consumer inflation expectation was lower than previous estimate at 5.4% rate.
• However market focus remains on how policy makers address soaring inflation particularly through monetary tightening.
• After experiencing a sharp correction, majority of US stock indices showed a positive weekly return. All indices (DJI, S&P 500 & NDX) posted >5% gain last week.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) continued to fall last week. The benchmark yield dropped 8 bps to 7.31% on Friday (06/24/22).
• The IDR slightly weakened against USD and was closed at IDR14,848 last week vs IDR14,841 in the previous day.
• However, Indonesia’s risk premium 5-year CDS posted a decline from 110.50 bps to 107.32 bps.
• Indonesia's International Investment Position recorded a net liability of USD287.1 billion in 1Q22 (vs. USD278.9 billion 4Q21).
• The increase was triggered by an increase in the flow of foreign funds, both in the form of direct investment and portfolio capital flows, especially to the stock market, which reflected the optimism of foreign investors towards the domestic 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 7.30-7.50% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0081, FR0084, FR0090, FR0047, FR0052, FR0054, FR0091.
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