Company Update

08 November 2022

Fixed Income Report November 8, 2022

Global Market Update
• The benchmark 10-year UST note yield increased 5 bps to 4.22% on Monday (11/07/22).
• At the same time, the benchmark for short term rate of 2-year maturity rose 6 bps to 4.72%.
• Yield curve inversion stayed and the spread of 2/10 year benchmark stood at - 50 bps (vs -49 bps last week).
• US equities indices continued its growth starting the week . The DJI increased 1.31%; while S&P 500 rose 0.97% and Nasdaq Composite climbed 0.85%.
• China’s exports in Oct-22 unexpectedly fell 0.3% YoY (vs 5.7% YoY growth in Sep-22), far from market consensus of a 4.3% growth, apparently driven by decline in overseas demand due to rising cost pressures.
• As a result, China reported a balance of trade of USD85.15 bn in Oct-22 instead of the projected USD95.95 bn.
• Germany’s industrial production in Sep-22 reported to rebound 0.6% MoM ( vs -1.2% MoM fall in Aug-22), exceeding consensus projection of 0.2%.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was relatively flat at 7.43% on Monday (11/07/22).
• Indonesia’s CDS fell 13.74 bps, at the same time domestic currency IDR appreciated against USD.
• Indonesia’s 5-year CDS stood at 126.41 bps yesterday (vs 140.15 last week).
• The IDR strengthened against USD and was closed at IDR15,708/USD on Monday (vs IDR15,738/USD last week).
• BI reported Indonesia’s official reserve assets to slightly declined to USD 130.2bn in Oct-22 (vs USD 130.8 bn in Sep-22), primarily due to payment of government’s external debt and IDR stabilization purposes.
• Indonesia’s GDP in Q322 reported to gain by 5.72%, higher than our & consensus estimate 5.66% YoY/5.60% YoY propelled by domestic consumption, increasing investment and robust export performance.
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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