Company Update

09 November 2022

Fixed Income Report November 9, 2022

Global Market Update
• The benchmark 10-year UST note yield declined 9 bps to 4.13% on Tuesday (11/08/22).
• At the same time, the benchmark for short term rate of 2-year maturity lowered 7 bps to 4.66%.
• Yield curve inversion widened and the spread of 2/10 year benchmark stood at -53 bps (vs -50 bps the previous day).
• US equities indices extended gain. The DJI climbed 1.02%; while S&P 500 rose 0.57% and Nasdaq Composite increased 0.49%.
• US Economic Optimism Index reported a decline to 40.4 in Nov-22 (vs 41.6 in Oct- 22), a continued pessimistic perception for 15 months in a row amid the Fed’s hawkish policy.
• UK reported a YoY increase in retail sales by 1.2% in Oct-22 (vs 1.8% YoY in Sep- 22), performing better than forecasts of 0.9% amid soaring cost of living.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) declined 2 bps to 7.41% on Tuesday (11/08/22).
• Indonesia’s CDS lowered 4.78 bps, at the same time domestic currency IDR appreciated against USD.
• Indonesia’s 5-year CDS stood at 121.62 bps yesterday (vs 126.41 the previous day).
• The IDR slightly strengthened against USD and was closed at IDR15,698/USD on Tuesday (vs IDR15,708/USD the previous day).
• Easing pressures on government bond market recently lead to better SUN result. DMO reported an increase in incoming bids to IDR22.3tn yesterday (vs IDR17.1tn in the previous auction), while the total awarded bids amounted to IDR10tn, in-line with indicative target.
• BI’s consumer survey reported an increase in Consumer Confidence Index to 120.3 in Oct-22 (vs 117.2 in Sep-22).
• The survey also reported Current Economic Condition Index to 112.3 (vs 108.3 in Sep-22), driven primarily by an increment in purchases of Durable Goods Index, and Consumer Expectation Index to 128.3 (vs 126.1 in Sep-22), propelled by consumer expectations of business activity moving forward.
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, FR0044, FR0095, FR0085, FR0091, FR0096.
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