Global Market Update
• Yields on UST note inched up 5-8 bps along the curve to start this week.
• The benchmark 10-year UST note yield rose 8 bps and hitting to above 3% on Monday (06/06/22).
• US equity market ended higher with DJI was up marginally by 0.05% while S&P 500 and Nasdaq Composite were closed 0.31% and 0.40% respectively.
• The spike in government bond yields occurs ahead of Fed’s FOMC meeting that is expected to raise another 50 bps in Jun-22.
• Most of Euro Zone bond yields also hit another multi year highs. The benchmark 10-year Germany and UK rose 5 bps and 9 bps.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was slightly flat at 6.95% on Monday (06/06/22).
• The IDR weakened against USD and was closed at IDR14,452 yesterday (vs IDR14,333) previously.
• Indonesia risk premium 5-year CDS increased and was closed at 93.87 bps from 93.50 bps previously.
• Government has tapped Samurai Bond market with a deal totaling JPY 81.0 billion consisting of 3-year, 5-year, 7-year and 10-year fixed-rate tranches.
• Today government will conduct auction for 7 series GDS with the indicative target of IDR20-30tn.
• Market risk skewed to the downside along with the jump in UST note yields caused by Fed’s aggressive tightening.
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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