Global Market Updates
• Yields on US government bond jumped along the curve yesterday. The short-term benchmark yield for 2-year hit above 4.50% while the 10-year rose and reached 4.80%.
• The US equity indices were mixed with the DJI led the gain after appreciating by 0.38% whereas NDX underperformed after falling 1.29% in a day.
• European stock markets also fell despite the correction was not the sharp one as US FOMC meeting is less than a week ahead.
• The DXY is now still hovering around 104 in Jun-23 and this position is higher than in May-23 although markets tendency is now betting a pause in the rate hike.
• Yet unlike in the previous day, the probability of Fed would raise another 25 bps increased to 36.1% after WB revised up global economic outlook citing a more resilient economy.
• World Bank sees that global economy is expected to grow by 2.1% in FY23E upwardly revised from 1.7% in the previous estimates largely driven by a more resilient global economies.
• Most of major economies such as US, Eurozone, and China are also upwardly revised for its economic outlook.
Domestic Market Updates
• The benchmark series of LCY government bond prices tended to appreciate yesterday with the benchmark 5-year yield (FR0095) fell 3 bps to below 6% and 10-year yield (FR0096) fell 2 bps to 6.32%.
• The IDR has depreciated against the greenback and closed at IDR14,878/USD from IDR14,860/USD on previous day or weakening by 0.12%.
• Risk perception still manageable despite slightly rising to 86 bps from previous position of 85 bps.
• Unlike in the government bond market, domestic equity market proxied by JCI remained on the bear side scenario and now approaching 6,600 psychological level.
Market Forecast
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 6.30-6.45% for today.
• Attractive Indo GB series to be traded today : R0081, FR0090, FR0087, FR0088, FR0062.
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