Global Market Update
• The benchmark 10-year UST note yield decreased 5 bps to 3.90% on Wednesday (10/12/22).
• On the other hand, the benchmark for short term rate of 2-year maturity fell 2 bps at 4.29% bringing the spread of 2/10 year benchmark at -39 bps.
• Volatility in the US stock market remained high. All the 3 benchmark indices for US equity dropped, although yields on government bond declined.
• The DJI fell 0.10%; S&P 500 declined 0.33% and Nasdaq Composite lost 0.09% on Wednesday.
• UK’s GDP contracted 0.3% MoM in Aug-22 after experiencing an expansion of 0.1% MoM in Jul-22.
• Bank of Korea (BoK) decided to raise the benchmark policy rate by 50 bps to 3.00%, in-line with consensus forecast.
• BoK’s rate hike in Oct-22 meeting was the 8th rise in the country’s borrowing cost since the central bank lifted the key rate in Aug-21.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) stayed flat at 7.35% on Wednesday (10/12/22).
• Indonesia’s CDS fell slightly but the domestic currency was flat yesterday.
• Indonesia’s 5-year CDS dropped below 160 bps to 159.77 bps yesterday (vs 161.57 bps on the previous day).
• The IDR was flat and closed at IDR15,357/USD on Wednesday.
• On the data front, domestic motorcycle sales reached 514,460 units in Sep-22, lower than August-22 with sales of 524,821 units. However it grew +10.7% YoY.
• Domestic motorcycle sales continue to show an increase which reflects the ongoing economic recovery. Motorcycle sales are now back to near pre-pandemic levels.
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 7.25-7.45% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0081, FR0095, FR0052, FR0073, FR0054, FR0091, FR0096.
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