Global Market Update
• The benchmark 10-year UST yield dipped below 3%. However UST yields were mixed yesterday (05/10/22).
• The shorter end UST yields were flattish while the belly and longer end yields fell.
• Market sentiment was driven by monetary policy adjustment. Central bank hawkish stance to fight against inflation has become major source for government bond yield spike globally.
• US equity market varied last night. Dow Jones fell 0.28% while S&P 500 and Nasdaq Composite gained 0.25% and 0,98% respectively.
• Recently US President Joe Biden also pressed congress to immediately pass a major aid package for Ukraine.
Domestic Market Update
• Yield on 10-year Indo GB jumped 14 bps and was closed at 7.39% yesterday. This is the highest level in more than 1 year.
• The IDR strengthened against USD to IDR 14.555/USD on May 10, 2022 (vs IDR14,573/USD in the previously).
• Risk premium which is reflected by the 5-year Indo CDS also fell and was closed at 110.04 bps.
• SUN auction conducted on 10/05/22 lacked of investors participation. The total incoming bid was only IDR19.74tn and the value awarded was IDR7.76tn which was lower than the indicative target set at IDR20-30tn.
• The lack of interest from investors to participate was caused by an increasing risk from external factors, namely the FFR hike which triggered outflows from SBN market and increased yields, which prompted investors to wait and see.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to keep steady within a range of 7.20-7.40% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0086, FR0090, FR0078, FR0052, FR0087, FR0091.
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