Global Market Update
• The benchmark 10-year UST note yield dropped 14 bps to 4.10% on Tuesday (10/25/22).
• At the same time, the benchmark for short term rate of 2-year maturity fell 3 bps to 4.48%.
• Yield curve inversion widened and the spread of 2/10 year benchmark stood at - 38 bps (vs -25 bps the previous day).
• US equity indices performed strongly. The DJI was up 1.07%; S&P 500 rose 1.63% and Nasdaq Composite jumped 2.25%.
• Germany’s IFO Business Climate Index in Oct-22 edged lower to 84.3% (vs 84.4% in Sep 22), but surpassing consensus’ forecast of 83.3%.
• Consensus projected Australia’s inflation rate in 3Q22 to be 7% YoY (vs 6.1% YoY in 2Q22).
• USA’s CB Consumer Confidence Index in Oct-22 reported to drop to 102.5 (vs 107.8 in Sep 22)
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 3 bps to 7.64% on Tuesday (10/25/22).
• Indonesia’s CDS slightly increased, at the same time domestic currency IDR depreciated against USD.
• Indonesia’s 5-year CDS stood at 159.11 bps yesterday (vs 158.73 the previous day).
• The IDR weakened against USD and was closed at IDR15,623/USD on Monday (vs IDR15,587/USD last week).
• Ministry of Finance reported an increase in total bid (IDR17 tn vs IDR15 tn the last auction) and total awarded bonds (IDR12 tn vs IDR8.2 tn the last auction) in yesterday’s Government Bond auction, with FR0096 as the highest bid and awarded series (IDR6.7 tn bid; IDR4.3 tn awarded).
• PEFINDO reported total issued Corporate Bonds in 3Q22 amounted to IDR131.9 tn (vs IDR77.5 tn in 3Q21).
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 7.50-7.70% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0081, FR0095, FR0052, FR0073, FR0054, FR0091, FR0096.
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