Global Market Update
• The U.S. Labor Department reported CPI rose 5.4% YoY and core inflation increased 4.3% YoY in July-21, in line with market expectation.
• 10 year U.S. treasury yield dipped 1 bps to 1.33% as of last night (08/11/21).
• The yield declined along with the strong demand on the auction. However, the Fed officials Raphael Bostic and Eric Rosengren said the start of a bond purchase taper should happen in the 4Q21.
• U.S. equity market closed mixed with DJI rose by 0.62%; S&P 500 added 0.25% and Nasdaq Composite lagged behind with the correction of 0.16%.
Domestic Market Update
• Domestic capital market closed yesterday commemorating national holiday. As of August 10, 2021 10 year Indo GB yield slid 1 bps to 6.33% and in line with our expectation.
• Rupiah continued to depreciate against USD and reaching a level of 14,383/USD on Tuesday.
• Indonesia’s retail sales figure recorded a growth of 2.5% YoY in June-21, lower than expectation at 4.5% YoY. The deceleration was driven by normalized consumption post Ramadhan festivities and Eid ul Fitr momentum.
• Government successfully issued IDR11tn from sharia debt securities auction on August 10, 2021. The total amount awarded was IDR1tn lower than its indicative target despite investors appetite remained high as showed by its incoming bids reaching IDR51.66tn although slightly lower than July-21 auction which came at IDR56.69tn.
Market Projection
• We still see a potential correction for today’s market activity given lagging time due to a national holiday.
• 10 year Indo GB yield will likely to move within range of 6.30% - 6.35% for today (08/12/21).
• We like FR0086, FR0078, FR0082, FR0087, FR0068, FR0083 and FR0089 for trading purposes.
Disclaimer
