Global Market Updates
• US treasury notes yield rose on the last day of previous week trading after job reports showed higher than expected data
• The benchmark 10-year UST note yield increased 6 bps to 3.44%, whereas the 2-year benchmark increased even higher with 13 bps jump to 3.92% on Friday.
• US Bureau of Labor Statistics reported the NFP increased by 253,000 beating market expectations of 180,000 in Apr-23.
• Additionally, US unemployment rate fell to 3.4% in Apr-23 from 3.5% in Mar-23, lower than broad market expectation of 3.6%.
• Higher than expected job report has triggered the equity market to jump. The benchmark stock indices (DJI, S&P 500 and NDX) recorded >1% appreciation.
• Fed and ECB have delivered 25 bps interest rate hike last week bringing the borrowing cost to the highest level since 2008 GFC.
Domestic Market Updates
• Overall, the LCY government bond yields rose indicating a price decline on the last trading day of previous week.
• The benchmark 10-year (FR0096) yield experienced 2 bps increase to 6.42% on Friday (May 5, 2023).
• The IDR appreciated 0.05% against USD and closed at 14,678/USD on Friday, whilst the 5-year CDS also fell to below 100 bps at the same time.
• Bank Indonesia (BI) reported foreign net selling in the domestic financial market amounting IDR1tn. Both SBN and equity market recorded a sell off. However the sell off remained manageable.
• Markets now await for Indonesia’s FX reserves for Apr-23 that we expect to slightly increase as inflows keep coming.
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 6.40-6.60% for today.
• Attractive Indo GB series to be traded today : FR0046, FR0070, FR0077, FR0044, FR0081, FR0084, FR0086, and FR0088.
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