Global Market Updates
• Upon the resumption from the holiday, US government bond was traded up as yields declined substantially along the curve on Tuesday (May 30, 2023).
• The benchmark of 2-year and 10-year yields fell 11 bps respectively to 4.45% and 3.69% at the same time.
• Market was cheered as US government finally reached an agreement to raise debt limit without a nominal cap until 2025.
• However, despite the government bond yield declined, US stock market closed mixed. The NDX led the gain with 0.32% appreciation.
• In Asia, China’s manufacturing activity unexpectedly fell to 5 months low. The official NBS manufacturing PMI data dropped to 48.8 in May-23.
• Elsewhere in Australia, the annual inflation rate also unexpectedly increased to 6.8% in Apr-23 after decelerating for some period and beating consensus of 6.4% increase.
Domestic Market Updates
• The benchmark LCY government bond yield for 10-year (FR0096) was flat at 6.38% on Tuesday (May 30, 2023).
• The IDR has depreciated against USD and other currencies. It was traded and closed at IDR14,985/USD and approaching IDR15,000/USD psychological level.
• However, Indonesia’s 5-year CDS finally dropped below 90 bps and closed at 86.21 bps despite IDR depreciation.
• In spite of the ups and downs experienced by global market, domestic government bond has shown its resilience.
• Given the adequate liquidity due to maturity of some series as well as still coming foreign inflows help to stabilize domestic bond market.
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 : FR0081, FR0090, FR0087, FR0088, FR0062.
MNCS Research
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