Global Market Update
• The benchmark 10-year note yield jumped 7 bps to 3.56% on Tuesday (09/20/22)
• On the other hand, the 2-year benchmark also increased 3 bps to 3.97% at the same time.
• Yield on the benchmark 2-year government bond finally is approaching 4% level.
• Spread between 2/10-year UST note yield was at -41 bps or narrowing from the previous day position at -45 bps.
• US stock indices fell on Tuesday. The DJI and S&P 500 dropped more than 1%.
• Whilst Nasdaq Composite lost 0.95% of its market cap at the same time.
• Financial market movement still responding Fed’s hawkish monetary policy stance.
• Despite Fed is expected to raise FFR by 75 bps on Sep-22, some market participant also anticipate 100 bps hike.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR009) declined 2 bps at 7.17% on Tuesday (09/20/22).
• Indonesia’s 5-year CDS finally rose to above 120 bps yesterday after moving within range of 100-110 bps last week.
• However, the IDR continued to depreciate against USD. The IDR was closed at IDR14,984/USD on Tuesday (vs IDR14,978/USD on Monday).
• The government issued 6 series of SBSN worth IDR6.3 trillion at auction Tuesday (20/09/22). The issuance value is lower than the indicative target of IDR9 trillion.
• We see lower investors appetite on yesterday's auction reflected by the incoming bids value amounting at IDR17.1 trillion (vs. IDR24.1 trillion in the previous auction). We believe investors still wait & see ahead of FOMC meeting & recent increase in UST note yield.
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 : FR0063, FR0070, FR0077, FR0081, FR0086, FR0090, FR0064, FR0082, FR0087, FR0091, FR0096.
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