Global Market Updates
• Yields on US government bond stabilized as market participants closely monitor the development of debt ceiling negotiation and monetary policy.
• Yields on US government bond for the long-term 10-year fell 2 bps to 3.70% while the short-term bond yield was stable at 4.32%.
• Stock market fell with the DJI dropped 0.69% while S&P 500 and NDX fell more than 1% yesterday.
• US debt ceiling negotiations have stalled last week and is expected to continue until agreement is formed to avert the default risk that is estimated as soon as June 1, 2023.
• On the other hand, mixed sentiments coming from various Fed’s officials also could weigh market sentiments.
• According to Fed’s CME FedWatch, market participants expect US central bank to hold FFR on the upcoming meeting with probability of 69.2%.
Domestic Market Updates
• The benchmark LCY government bond price traded up on Tuesday (May 23, 2023). The benchmark for 10-year (FR0096) yield marginally increased 1 bps and closed at 6.42%.
• Indonesia’s government bond yield was relatively stable on the back of appreciating IDR and improving CDS.
• Domestic currency appreciated against USD and closed at IDR14,875/USD yesterday from IDR14,890/USD on Monday.
• Indonesia’s 5-year CDS keeps declining and now approaching to 90 bps and closed at 90.08 bps yesterday.
• SBSN auction results showed an improvement with the incoming bids reaching IDR54.75tn or higher than previous auction while of the 6 series offered government has awarded IDR7tn.
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 6.40-6.55% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0081, FR0090, FR0091, FR0088, FR0093 and FR0062.
MNCS Research
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