Global Market Update
• Benchmark 10-year UST note yield was slightly flat at 2.76% on Thursday (05/26/22).
• US equity market jumped with DJI rose +1.61%; S&P 500 was up +1.99% and Nasdaq Composite lead all gain with +2.68%.
• Based on FOMC minutes, most Fed policymakers see that +50 bps increases in FFR target range would be appropriate at the next couple of meetings.
• FOMC also stated that US central bank may move its neutral policy stance into restrictive mode depending on evolving economic outlook.
• US GDP contracted an annualized of -1.5% in 1Q22, slightly worse than initial estimate of 1.4% decline, primarily dragged down by trade.
• Initial jobless claims as at end of 21-May was 210k, lower than previous period of 218k and 215k consensus estimate.
• Meanwhile core US PCE prices jumped +5.1% YoY based on the 2nd estimate of 1Q22, compared to 5.2% YoY in the advance estimate and 5% YoY in the previous period.
Domestic Market Update
• The benchmark 10-year Indo GB yield decreased 3 bps to 7.17% on Wednesday (05/25/22).
• The IDR strengthened against USD to IDR 14,633/USD on Wednesday from IDR14,661/USD on the previous day.
• Indonesia risk premium 5-year CDS was closed at 114.35 bps before market holiday.
• Bank Indonesia (BI) recorded banking loan disbursement grew 9.1% YoY on Apr-22, higher than 6.7% YoY on Mar-22.
• Bank credit continues to grow in line with the continued economic recovery and in the midst of loose banking liquidity.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 7.10-7.30% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0084, FR0064, FR0078, FR0091, FR0068, FR0072.
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