Global Market Update
• Yield on the short term US treasury notes are still increasing, while the longer- term stayed flattish.
• The benchmark 10-year yield was at 3.93% on Tuesday (02/28/23). The short- term rate of 2-year benchmark rose 4 bps to 4.82%.
• US stock indices dipped in red last night. The DJI lost 0.71%; S&P 500 dropped 0.31% and Nasdaq Composite fell 0.10%.
• The decline in the stock market came after disappointing consumer confidence.
• US CB Consumer Confidence came at 102.9 in Feb-23, lower than 106 in Jan-23 and 108.5 consensus estimate.
• India reported a 4Q22 GDP growth of 4.4% YoY, slightly below market expectation of 4.6% YoY. It was also below previous quarter of 6.3% YoY.
Domestic Market Update
• Domestic IDR denominated government bond prices continued to weaken yesterday.
• Yield on the benchmark 10-year (FR0096) increased 3 bps to 6.88% on Tuesday (02/28/23).
• The IDR slightly strengthened against USD and was closed at IDR15,261/USD yesterday after previously closed at IDR15,270/USD on Monday.
• Indonesia’s 5-year CDS stayed below 100 bps and closed at 93.05 bps yesterday.
• SUN auction results : incoming bids hit ~IDR46tn and the total amount awarded of 7 series were IDR20tn.
• The total incoming bids were lower than previous auction on 31 January of ~IDR56tn and the total awarded slightly lower than indicative target.
• Domestic factory activity remained expansive reflected by manufacturing activity of 51.2 in Feb-23.
• Market will also look at Feb-23 inflation data release and expect 5.44% YoY increase.
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 6.80-7.00% for today.
• Attractive Indo GB series to be traded today : FR0046, FR0070, FR0077, FR0044, FR0081, FR0086, FR0096, FR0098.
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