Global Market Update
• The benchmark 10-year note yield was flat at 3.41% on Wednesday (09/14/22).
• On the other hand, the 2-year benchmark yield continued to increase and hitting bps to 3.79% at the same time.
• Spread between 2/10-year UST note yield was at -38 bps, widening from previous position at -31 bps indicating a yield curve inversion.
• US stock indices rebounded slightly after Tuesday’s market large selloff and correction.
• The DJI rose 0.1%; S&P 500 gained 0.3% whilst Nasdaq Composite increased 0.7% yesterday.
• US stock market suffered the worst day since Jun-20 after Aug-22 CPI data release on Tuesday.
• US inflation rate increased 8.3% YoY last month. The figure was lower than the previous month rate of 8.5% YoY, yet still higher than consensus estimate of 8.1% YoY.
• Higher than expected inflation rate would likely to push Fed’s plan to raise the reference interest rate further.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 2 bps to 7.11% on Wednesday (09/14/22).
• The benchmark government bond yield moved in a range of 7.00-7.20% this week.
• Indonesia’s 5-year CDS was still in the range of 100-110 bps this week.
• The IDR weakened against USD. The IDR was closed at IDR14,908/USD on Wednesday (vs IDR14,852/USD on Tuesday).
• The trade balance surplus is estimated to reach USD4.3 billion in August-22, supported by exports +17.71% YoY and imports +25.55% YoY (MNCS Forecast).
• We expect that the trade balance surplus will continue in-line with high commodity prices, primarily for coal.
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 7.10-7.30% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0086, FR0090, FR0064, FR0082, FR0087, FR0091, FR0096.
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