Global Market Update
• Yield on UST notes were traded up 6-13 bps along the curve.
• Benchmark 10-year UST note yield was up 10 bps and closed at 2.98% on Tuesday (05/18/22).
• US equity market rebounded strongly. DJI was up +1.34% while S&P 500 and Nasdaq Composite jumped +2.02% and +2.76% respectively.
• On a data front, US retail sales came in as expected increasing by +0.9% MoM in Apr-22.
• Meanwhile industrial production rose +1.1% MoM in Apr-22, higher than previous month pace and consensus estimate each at +0.9% MoM and +0.5% MoM.
• Capacity utilization also rose to 79% in Apr-22 from 78.2% in Mar-22.
• Sentiment also came from former Fed’s Chair Ben Bernanke that commented Fed had a mistake to let inflation jumped to the worst episode in the last 4 decades.
Domestic Market Update
• Yield on 10-year Indo GB dropped 5 bps to 7.31% on Tuesday (05/17/22).
• The IDR also weakened against USD and was closed to IDR 14.650/USD, the lowest in a year.
• However, Indonesia 5-year CDS rose to 123,35 bps from 115,10 bps previously.
• Indonesia trade balance recorded a surplus of USD7.56bn in Apr-22, the highest in history and marking 24 straight months of surplus.
• Indonesia exports jumped +3.11% MoM/+47.76% YoY while imports recorded a monthly decline of -10.01% MoM/+21.97% YoY.
Market Projection
• Given the recent development on global and domestic market and after a high yield spike, 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, FR0073, FR0091, FR0068, FR0072.
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