Global Market Update
• The benchmark 10-year UST note yield was relatively flat at 4.01% on Monday (10/17/22).
• On the other hand, the benchmark for short term rate of 2-year maturity dropped 5 bps to 4.45% at the same time.
• Yield curve inversion narrowed and the spread of 2/10 year benchmark stood at -44 bps (vs -48 bps last week).
• US equity indices rebounded sharply to start this week. The DJI was up 1.86%; S&P 500 rose 2,65% and Nasdaq Composite jumped 3.43%.
• ECB policymakers said that inflation will likely stay above the central bank's target for an extended period and that growth concerns should not prevent a needed increase in interest rates.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) rose 7 bps to 7.42% on Monday (10/17/22).
• Indonesia’s CDS was relatively flat but domestic currency IDR still depreciating against USD.
• Indonesia’s 5-year CDS stood at 159,17 bps yesterday (vs 160 bps last week). • The IDR weakened against USD and was closed at IDR15,488/USD on Monday (vs IDR15,423/USD last week).
• At the end of August 2022, the position of external debt in Indonesia stood at USD397.4 billion, down from USD400.2 billion in the previous month.
• The position of government external debt retreated to USD184.9 billion in August 2022 from USD185.6 billion in July 2022.
• The position of private external debt decreased to USD204.1 billion from USD206.1 billion in the previous month.
• External debt was still manageable in August 2022, as reflected by a lower ratio of external debt to gross domestic product (GDP) from 30,7% in July 2022 to 30.4% in August 2022.
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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