Company Update

12 Mei 2022

Fixed Income Report May 12, 2022

Global Market Update
• The benchmark 10-year UST continued to fall. It was settled down 6 bps to 2.93% on Wednesday (05/11/22).
• US longer maturity bonds (>10-years) have fallen 6-8 bps, while the shorter ends were flattish.
• Albeit the drop in UST note yields, the equity market fell last night. DJI and S&P 500 dipped 1.02% and 1.65% respectively.
• Meanwhile at the same time, tech-heavy index Nasdaq Composite declined 3.18%.
• US CPI rose +0.3% MoM/+8.3% YoY in Apr-22. Inflation was higher than consensus estimate that expected to rise only +0.2% MoM/+8.1% YoY.
• However, the pace of inflation has decelerating. Inflation is expected to hit the peak in Mar 22.

Domestic Market Update
• Yield on 10-year Indo GB moved sideways at 6.38% yesterday. However the shorter maturity bond yields were higher.
• The IDR was stable against USD and was closed to IDR 14.554/USD.
• Risk premium which is reflected by the 5-year Indo CDS also fell and was from 110.04 bps to 106.93 bps.
• On the data front, domestic retail sales are expected to still grow positively by +11.5% YoY in Mar-22.
• We view that the positive annual growth in retail sales is influenced by several factors: 1) improvement in mobility and 2) the continued trend of economic recovery.

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, FR0077, FR0090, FR0078, FR0052, FR0087, FR0091.

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