Global Market Update
• Yields on UST note were slightly closed slightly lower, down by 1-3 bps along the curve on Thursday (06/02/22).
• The benchmark 10-year UST stayed hovering around 2.92% last night.
• US equity market rose with DJI was up 1.33%; S&P 500 increased 1.84% and Nasdaq Composite jumped 2.69%.
• On the data front, US private sector employment only rose 128,000 in May-22 or lower than consensus estimate to add 299,000.
• US initial jobless claims fell 11,000 to a seasonally adjusted 200,000 for the period ended in May 28, 2022.
• Fed Vice Chair Lael Brainard said that US central bank is unlikely to take a break from current rate hiking cycle anytime soon given inflation rate is at 40 year highs.
• Eurozone government bond yields also jumped to a multi-year highs amidst potential monetary tightening.
• ECB is expected to raise its benchmark policy rate by 120 bps by year end of FY22F.
• Germany 10-year government bond yield rose 4 bps to 1.23%, the highest level since Sep-13.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was down by 4 bps to 6.99% on Thursday (06/02/22).
• The IDR continue to strengthen against USD to IDR 14,483/USD from 14,534/USD.
• Indonesia risk premium 5-year CDS increased and was closed at 96.63 bps on yesterday.
• Statistics Indonesia reported domestic inflation rose +0.40% MoM/+3.55% YoY in May-22, in line with our forecast.
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 6.90-7.10% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0084, FR0090, FR0078, FR0085, FR0054, FR0091.
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