Global Market Update
• The benchmark 10-year note yield decreased 19 bps to 3.64% on Monday (10/03/22).
• On the other hand, the 2-year benchmark yield dropped 16 bps to 4.12% at the same time.
• Spread between 2/10-year UST note yield was at -48 bps, widening from the previous day position at -45 bps.
• Following the drop in the risk free rate, US stock market rebounded sharply to start the last quarter in 2022.
• The DJI jumped 2.66%; S&P 500 rose 2.59%, whilst Nasdaq Composite gained 2.27%.
• On the data front, US ISM PMI manufacturing fell to 50.9 in Sep-22 (vs 52.8 in Aug-22).
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) declined 4 bps to 7.31% on Monday (10/03/22).
• Indonesia’s 5-year CDS decreased to below 160 bps to start this week. Indonesia’s risk premium was at 159.74 bps.
• The IDR remained above 15,000/USD and was closed at IDR15,303/USD yesterday.
• On the data front, Indonesia’s CPI was reported an increase 5.95% YoY in Sep-22, in-line with our expectation.
• The increase in inflation rate was driven by government that set subsidized fuel price increase for Pertalite and diesel fuel by 30-31%.
• Government plans to conduct SBSN auction targeting IDR5tn issuance for 6 series, lower than in the previous auction.
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 : FR0063, FR0070, FR0077, FR0081, FR0090, FR0064, FR0095, FR0082, FR0087, FR0091, FR0096.
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