Global Market Updates
• US treasury notes yield traded mixed on Thursday (May 11, 2023) as inflation cooling down giving a positive catalyst for bond prices. Interestingly, global government bond yield also declining
• The short term bond of 2-year benchmark yield traded up to 3.91% whereas the 10-year benchmark fell 5 bps to 3.39% at the same time.
• US reported 0.2% MoM increase in PPI in Apr-23, this was below consensus estimate of an increase 0.3% MoM.
• The PPI data confirmed that US economy is gradually cooling down. Previously, US inflation rate at 4.9% YoY in Apr-23 after peaking in Jun-22 that hit 9.1% YoY.
• The latest inflation figure was the lowest record since Apr-21 marking the lowest pace in the last 2 years.
• US equity markets traded mixed with DJI and S&P 500 fell 0.66% and 0.17% respectively, whereas NDX rose 0.18%.
Domestic Market Updates
• The benchmark LCY government bond traded up yesterday along with IDR appreciation and improving risk sentiments.
• The benchmark 10-year (FR0096) yield declined 6 bps and closed at 6.39% on Thursday (May 11, 2023).
• Besides that, other benchmark such also recorded a yield decline (FR0095 : -6bps; FR0098 : -9bps; FR0098 : -6bps) on a daily basis.
• The IDR mostly appreciated against major currencies. The local currency strengthened 0.07% against USD and closed at IDR14,722/USD.
• Indonesia’s 5-year CDS also inched lower by 0.7% on a daily basis to 98.4 bps at the same time.
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 6.30-6.50% for today.
•Attractive Indo GB series to be traded today : FR0070, FR0077, FR0044, FR0040, FR0084, FR0042, FR0096.
MNCS Research
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