Global Market Update
• The benchmark 10-year note yield increased 8 bps to 3.83% on Thursday (10/06/22).
• On the other hand, the 2-year benchmark yield increased 11 bps to 4.26% at the same time.
• Spread between 2/10-year UST note yield was at -43 bps, widening from the previous day position at -39 bps.
• Following the rise in the risk free rate, US stock market fell again yesterday.
• The DJI declined 1.15%; S&P 500 fell 1.02%, whilst Nasdaq Composite lost 0.68%.
• Market is still reacting to Fed’s plan to further tighten to fight against recent multi-decade high inflation.
• Short term rates jumped significantly and moving more volatile responding to Fed’s plan to raise the reference rate to 4.4% by the end of 2022 and to 4.6% next year.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) was flat at 7.18% on Thursday (10/05/22).
• Indonesia’s 5-year CDS increased and reached 150 bps again yesterday.
• The IDR remained above 15,000/USD but appreciated against USD and was closed at IDR15,188/USD yesterday.
• In the second week of the offering period, ORI022 sold up to IDR4.25 trillion from the target of IDR 10 trillion.
• Retail investors' enthusiasm for retail government securities continues to increase. With a coupon of 5.95% per year, ORI022 is an attractive investment choice and we estimate that the IDR10trillion issuance target is easy to achieve.
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 7.15-7.35% 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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