Global Market Update
• The benchmark 10-year UST note yield increased 7 bps to and finally topping 4.00% on Friday (10/14/22).
• On the other hand, the benchmark for short term rate of 2-year maturity rose 2 bps hitting 4.50% at the same time.
• Yield curve inversion narrowed and the spread of 2/10 year benchmark stood at -48 bps (vs -52 bps on the previous day).
• Following the rise in government bond yield, US stock indices plummeted erasing previous gain.
• The DJI dropped 1.34%; S&P 500 declined 2.37%; Nasdaq Composite lost 3.08%.
• Elsewhere, UK’s benchmark government bond yield continued to increase. UK Gilt 10-year yield rose to 4.31% as BoE emergency bond buying program ended last week.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) rose 2 bps to 7.35% on Friday (10/14/22).
• Indonesia’s CDS rose again and domestic currency IDR still depreciating against USD.
• Indonesia’s 5-year CDS dropped topping 160 bps again on Friday last week.
• The IDR weakened against USD and was closed at IDR15,423/USD on Friday last week (vs IDR15,362/USD previous day).
• On the data front, international trade projection Sep-22 MNCS, export +31.60% YoY; imports +40.12% YoY; trade balance surplus of USD 4.387 billion.
• Export performance is still supported by persistently high global coal prices, while imports are supported by continued domestic economic recovery.
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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