Company Update

09 Maret 2023

Fixed Income Report March 9, 2023

Global Market Update
• US short-term government bond yield spiked causing a yield curve inversion to worsen.
• The 2/10-year yield spread is currently stood at 108 bps given 6 bps higher of the 2-year yield at 5.07%.
• Government bond yield on the benchmark 10-year was relatively steady but approaching to 4%.
• In spite of worsening yield curve inversion, US tock indices closed mixed on Wednesday (03/08/23).
• The DJI was 0.18% lower whereas S&P 500 and Nasdaq Composite rose 0.14% and 0.40% respectively.
• Fed’s Chair Powell testimony in front of US Congress indicate that the ultimate interest rates is likely to be higher than anticipated.
• Furthermore, Powell also said that stronger than expected economic data could also justify a faster interest rate hike pace.

Domestic Market Update
• Most of domestic currency government bond prices fell on Wednesday (03/08/23).
• Yield on the benchmark 10-year (FR0096) rose 7 bps and finally hitting above 7.00% yesterday.
• The IDR weakened weakened significantly against USD and closed at 15,438/USD yesterday (vs IDR15,367/USD on the previous day).
• On the other hand, Indonesia’s 5-year CDS also increased by 5.58 bps and closed at 93.72 bps.
• The steep IDR depreciation against USD has triggered domestic central bank to intervene.

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 : FR0046, FR0070, FR0077, FR0044, FR0081, FR0086, FR0096, FR0098.

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