Global Market Update
• Yields on short, medium and long term experienced a daily and weekly decline as markets weigh on US banking turmoil.
• The short-term US Treasury Note for 2-year benchmark fell 32 bps to 3.84% on Friday (03/17/23).
• At the same time the long-term benchmark yield for 10-year dropped 15 bps to 3.43% yesterday.
• Despite lower government bond yields, US equity indices experienced a correction with DJI turned out to be the worst performing index.
• DJI fell 1.19% and S&P 500 corrected 1.10%. Nasdaq Composite also fell, yet still performing better after a drop of 0.74% last Friday.
• US inflation keep slowing down as CPI rose 6.0% YoY in Feb-23, the lowest level since Sep-21.
• US annual inflation rate last month was lower than previous month of 6.4% YoY.
Domestic Market Update
• Domestic currency government bond prices closed mixed on Friday (03/17/23).
• Yield on the benchmark 10-year (FR0096) recorded a decline of 5 bps and closed at 6.88%.
• The IDR strengthened against USD and closed at 15,345/USD on Friday (vs IDR15,389/USD previous day).
• Indonesia’s 5-year CDS started to decrease despite still higher than 100 bps and currently stood at 105.04 bps.
• Bank Indonesia reported a foreign net buying in the domestic financial market totaling IDR9.59tn during 13-16 March 2023.
• The SBN market recorded a foreign inflows of IDR10.31tn yet equity market experienced a net selling of IDR0.73tn.
• Despite rising concern on the possibility of next global financial crisis, domestic bond market is still perceived to be a safe spot and offering a good asset to diversify.
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 6.75-6.95% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0046, FR0081, FR0091, FR0096.
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