Global Market Update
• UST note yield increased sharply after Labor Day. The benchmark 10-year note yield rose 15 bps to 3.34% on Tuesday (09/06/22).
• On the other hand, the 2-year benchmark yield also jumped 12 bps to 3.51% at the same time.
• Spread between 2/10-year UST note yield was at -17 bps indicating a yield curve inversion.
• US stock indices extended a decline following the rise of UST note yield. The DJI fell 0.55%; S&P 500 was down 0.41% whilst Nasdaq Composite dropped 0.74%.
• On the data front, US non-manufacturing PMI recorded at 56.9 in Aug-22, higher than consensus estimate at 55.5.
• Elsewhere in Europe, market participants await for ECB interest rate decision this week.
• Following the probability of 75 bps rate hikes, government bond yield increased steeply.
• The benchmark 10-year Germany hit 1.63% while UK’s 10-year benchmark hit above 3% at the same time.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) rose marginally by 1 bps to 7.15% on Tuesday (09/06/22).
• The IDR strengthened against USD and was closed at IDR14,887/USD on Tuesday (vs IDR14,903/USD on Monday).
• Indonesia’s 5-year CDS was still above 120 bps and closed at 120.30 bps on Tuesday.
• Government has conducted auction yesterday and issued 6 series of SBSN amounted at IDR9tn achieving its indicative target.
• However the value of incoming bids were at IDR24.14tn, lower than in the previous auction of IDR28.54tn as we already expected.
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 : FR0070, FR0081, FR0086, FR0090, FR0064, FR0082, FR0087, FR0091, FR0096.
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