Global Market Update
• US treasury notes yield recorded a decline after Fed decided to raise the policy rate as broadly expected
• The benchmark 10-year UST note yield fell 9 bps to 3.34%, whereas the 2- year benchmark fell even deeper with 15 bps decline to 3.81% yesterday.
• Fed has raised 25 bps the benchmark policy rate and bringing it to the range of 5.00-5.25%, the highest since September 2007.
• Despite the policy taken is already expected and the government bond yield declining US stock market still experiencing a correction.
• The DJI and S&P 500 each fell 0.80% and 0.70%, while Nasdaq Composite declined 0.46%.
• Going forward Fed may pause the tightening cycle and market expects 91% probability of holding the interest rate unchanged in the next meeting.
• After Fed, now markets await for ECB monetary policy by which consensus expect 25 bps hike in policy rate.
Domestic Market Update
• The LCY government bond prices were traded up yesterday amidst continued decline in the stock market.
• The benchmark 10-year (FR0096) yield experienced 4 bps decline to 6.46% yesterday.
• Furthermore, the IDR also appreciated against USD and closed at 14,692/USD yesterday after closed at 14,714/USD on the previous day.
• Indonesia’s 5-year CDS slightly increased and closed at 98.72 bps at the same time.
• Markets now await Indonesia’s 1Q23 GDP data that we expect to expand with 5.0% growth rate.
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 6.50-6.70% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0044, FR0081, FR0084, FR0086, and FR0088.
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