Global Market Update
• The benchmark 10-year note yield decreased marginally by 1 bps to 3.63% on Tuesday (10/04/22).
• On the other hand, the 2-year benchmark yield dropped 3 bps to 4.09% at the same time.
• Spread between 2/10-year UST note yield was at -46 bps, narrowing from the previous day position at -48 bps.
• Following the drop in the risk free rate, US stock market continued to rebound sharply.
• The DJI jumped 2.80%; S&P 500 rose 3.06%, whilst Nasdaq Composite gained 3.34%.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) declined 6 bps to 7.25% on Tuesday (10/04/22).
• Indonesia’s 5-year CDS decreased to below 150 bps yesterday. Indonesia’s risk premium was at 148.67 bps.
• The IDR remained above 15,000/USD but appreciated against USD and was closed at IDR15,245/USD yesterday.
• Investors appetite in the SBSN auction on Tuesday (10/04/22) has decreased as reflected in the value of incoming bids of only IDR7.05 trillion (vs. IDR17.11 trillion in the 20 September 2022 auction).
• Lower investors appetite in yesterday's auctions has made the total of SBSN issuance only IDR755 billion, far below from the indicative target of IDR5trillion. Hence, the government will again conduct a green shoe option today.
• We believe that the decline in investors interest was caused by the turmoil in global financial markets that triggered the US Treasury yields and the US Dollar index to strengthen.
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 7.20-7.40% 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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