Global Market Update
• US treasury notes yield recorded a marginal increase after Fed decided to raise another 25 bps hike in May-23 meeting.
• The benchmark 10-year UST note yield rose 4 bps to 3.38%, whereas the 2-year benchmark fell 2 bps to 3.79% 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.
• US stock market fell with the DJI and S&P 500 each fell 0.86% and 0.72%, while Nasdaq Composite declined 0.49%. • Following the Fed, ECB delivered 25 bps hike on its interest rate to 3.75% in-line with broad market expectation.
• The Euro Area borrowing cost now stood at the highest level since Jul-08. Going forward, ECB signaling a slowing pace of policy tightening amid uncertain economic condition.
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 5 bps decline to 6.41% yesterday.
• Furthermore, the IDR also appreciated against USD and closed at 14,685/USD yesterday after closed at 14,692/USD on the previous day.
• Indonesia’s 5-year CDS slightly increased and finally hit above 100 bps again.
• Indonesia’s GDP expanded 5.03% YoY in 1Q23, in-line with MNCS estimate of +5.00% YoY, showing that domestic economy remain strong despite challenging macro factors.
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 6.45-6.65% for today.
• Attractive Indo GB series to be traded today : FR0046, FR0077, FR0085, FR0075, FR0062 and FR0076.
MNCS Research
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