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Company Update

04 November 2022

Fixed Income Report November 4, 2022

Global Market Update
• The benchmark 10-year UST note yield increased 4 bps to 4.14% on Thursday (11/03/22).
• At the same time, the benchmark for short term rate of 2-year maturity rose 10 bps to 4.71%.
• Yield curve inversion widened and the spread of 2/10 year benchmark stood at -57 bps (vs -51 bps the previous day).
• US equities continued its decline. The DJI declined 0.46%; while S&P 500 fell 1.06% and Nasdaq Composite dropped 1.73%.
• The BoE officially reported to increase their interest rate policy by 75 bps from 2.25% to 3% on Thursday (11/03/2022) setting the highest rate hike since 1989 based upon concerns of 40-year high inflation rate in Sep-22.
• Turkey’s Consumer Price Index in Oct-22 reported to increase 3.54% MoM (vs 3.08% MoM in Sep-22) and rise 85.51% YoY (vs 83.45% YoY in Sep- 22).
 
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 2 bps to 7.40% on Thursday (11/03/22).
• Indonesia’s CDS increased 4.72 bps, at the same time domestic currency IDR depreciated against USD.
• Indonesia’s 5-year CDS stood at 141.10 bps yesterday (vs 134.26 the previous day).
• The IDR weakened against USD and was closed at IDR15,697/USD on Thursday (vs IDR15,648/USD the previous day).
• The weakening of the IDR is still overshadowed by the aggressiveness of the US monetary policy which triggers the strengthening of the USD.
 
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 7.35-7.55% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0081, FR0095, FR0052, FR0073, FR0054, FR0091, FR0096.
 
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