Global Market Update
• Yield on the benchmark 10-year UST note rose 6 bps to 3.20% to start this week (06/27/22).
• Yields on US government bond was up 5-8 bps along the curve yesterday.
• Fed Chairman Jerome Powell acknowledged that sharply higher interest rate could push up unemployment but restoring price stability has become priority.
• Powell also reaffirmed US CB commitment to fight against 40-year high inflation levels.
• US equity indices booked a negative return to start this week. DJI was closed 0.20% lower, S&P 500 dropped 0.30% and Nasdaq Composite fell 0.72%.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) continued to fall. Yield dropped 5 bps to 7.26% on Monday (06/27/22).
• The IDR strengthened against USD and was closed at IDR14,797 yesterday vs IDR14,848 last week.
• Indonesia’s risk premium 5-year CDS posted a decline from 107.32 bps to 105.75 bps.
• BI reported broad based money (M2) grew 12.1% YoY in May-22 of , lower than the Apr-22 period of +13.6% YoY.
• M2 growth was influenced slower central government finances expansion and growth in credit disbursement.
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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