Global Market Update
• The benchmark 10-year note yield increased 4 bps to 3.45% on Thursday (09/15/22).
• On the other hand, the 2-year benchmark yield continued to increase and hitting bps to 3.87% at the same time.
• Spread between 2/10-year UST note yield was at -42 bps, widening from previous position at -38 bps indicating a yield curve inversion.
• US stock indices fell yesterday. The DJI fell 0.56%; S&P 500 dropped 1.13% whilst Nasdaq Composite came at worst with 1.43% decline.
• Yield on shorter maturity government bond continued to climb recently as higher than expected inflation could push another aggressive FFR hikes.
• Market still expect that on Sep-22 FOMC meeting, another 75 bps hikes would be taken with 80% probability.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 5 bps to 7.16% on Thursday (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 and closed at 105.36 bps yesterday.
• The IDR slightly strengthened against USD. The IDR was closed at IDR14,898/USD on Thursday (vs IDR14,908/USD on Wednesday).
•Statistics Indonesia reported Indonesia trade balance surplus of USD5.76bn on the back of rising exports (+30.15% YoY) still outperforming imports (+32.81% YoY).
•With 28-straight months of surplus will help Indonesia’s external vulnerability to remain manageable and favorable for asset valuation.
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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