Global Market Updates
• US treasury notes yield rose again on Tuesday (May 09, 2023) ahead of inflation data release.
• The short term bond of 2-year benchmark yielded 4.02% rising 2 bps from previous day, whereas the benchmark for 10-year yield rose marginally by 1 bps to 3.52% at the same time.
• Despite the government bond yield rose marginally, US stock market fell with NDX led the correction after dropping 0.63%
• Markets also wait for Apr-23 inflation data. Broad market consensus expect 5.0% YoY inflation rate.
• China’s trade surplus widened to USD90.2bn in Apr-23 beating consensus estimate of USD71.6bn and previous month figure of USD49.5bn.
• Exports grew 8.5% YoY surpassing market estimate of 8.0% YoY growth whilst imports unexpectedly fell 7.9% YoY pointing weaker domestic demand as commodity prices soften.
• Interestingly, China’s trade surplus with the US widened to USD29.7bn from USD27.6bn a month before.
Domestic Market Updates
• The benchmark LCY government bond prices fell yesterday with the 10-year bond yielded 4.77% or increasing 1 bps from previous day position.
• The IDR mostly depreciated against major currencies. The local currency depreciated 0.21% against USD and closed at IDR14,742/USD.
• Indonesia’s 5-year CDS also rose 2.1% on a daily basis to 97.1 bps or approaching 100 bps level.
• Despite the decline in price, investors appetite towards SBSN increased. DJPPR reported incoming bids in yesterday’s auction hit IDR40.7tn marking 64% higher than in previous SBSN auction.
• Government has awarded IDR9tn of SBSN in yesterday’s auction, in-line with indicative target set before.
• Bank Indonesia (BI) on its latest survey reported strengthening consumer confidence with CCI increase of 126.1 in Apr-23 (vs 123.3 in Mar-23).
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 6.40-6.60% for today.
• Attractive Indo GB series to be traded today : FR0046, FR0070, FR0077, FR0081, FR0084, FR0096, and FR0067.
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