Global Market Update
• The U.S. economic data again gaining its strength. Yet 10 year U.S. treasury yield traded flat las night (08/12/21).
• Price pressure was not also felt by consumers. Companies are no exception. July’s PPI came in hotter than expected. The PPI jumped +1.0% MoM/+7.8% YoY in July-21, higher than economist estimate at +0.6% MoM/+7.3% YoY.
• U.S. labor market is also improving. The number of initial jobless claims filed last week totaled 375,000 in line with economist projection. Continuing jobless claims numbered 2.87 mn last week which was lower than previous week and reaching a new Covid-19 era low.
• 10 year U.S. treasury yield closed at 1.36% while stock market ended higher with DJI rose 0.04%; S&P 500 increased by 0.3% and Nasdaq Composite was 0.35% higher.
Domestic Market Update
• 10 year Indo GB yield declined by 2 bps to 6.35%, in line with our expectation. The benchmark yield has dropped by 7 bps on a weekly basis.
• Rupiah was traded below 14,400/USD this week. U.S.-Indo spread remained stable at 499 bps.
• OJK recorded that Pension Fund investment in GDS has reached IDR84.43tn (+19.36% YoY) as of June-21. Foreign investors recorded a net buy as reflected by increasing ownership in terms of value and percentage in August alone.
• According to DJPPR, total holding of foreign investors in domestic GDS reached IDR977.21tn as of August 9, 2021 (vs IDR966.7tn on August 2, 2021).
Market Projection
• We expect market to consolidate with 10 year Indo GB yield will likely to move within range of 6.32% - 6.37% for today (08/13/21).
• We like FR0086, FR0071, FR0078, FR0087, FR0068, FR0080 and FR0083 for trading purposes.
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