Global Market Update
• Yields on the benchmark US Treasury notes increased along the curve starting this week.
• The benchmark 10-year UST note yield rose 17 bps to 3.55% on Monday (03/27/22). At the same time, yield on the short-term 2-year note also jumped 23 bps and hitting 4.00% again.
• US stock market closed varied last night. The DJI and S&P 500 gained 0.60% and 0.16% respectively.
• In contrast to DJI and S&P 500, Nasdaq Composite fell 0.47% at the same time when government bond yield spike.
• Markets are closely watching the continued development of SVB collapse, policy taken and its impact.
• Many reports showed that money outflows from small bank to US giants has slowed recently.
• Furthermore, FDIC also announced that First Citizen Banks & Trust Co would purchase deposits and loans of SVB at a discount.
Domestic Market Update
• Most of domestic currency government bond prices closed slightly higher on Monday (03/27/23).
• Yield on the benchmark 10-year (FR0096) stood at 6.75% starting this week.
• The IDR slightly weakened against USD and closed at 15,163/USD on Monday (vs IDR15,155/USD last week).
• Indonesia’s 5-year CDS was still hovering above 110 bps indicating that risk may persist for sometimes.
• Government will conduct auction for 7 series of SUN today targeting IDR20-30tn of financing. We believe investors appetite to a safer asset such as bond could still be high.
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, FR0070, FR0077, FR0081, FR0085, FR0072, FR0076.
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