Global Market Update
• Yields on UST note retreated following disappointed US job data. Yields fell 1- 3 bps along the curve.
• The 10-year UST yield decreased 2 bps to 1.77% last night. Meanwhile the 2- year UST yield closed at 1.14% in the same day.
• US stock market closed higher. DJI and S&P rose 0.63% and 0.94% respectively.
• Tech stock also rebounded with Nasdaq Composite jumped 0.50%.
• Private US payrolls fell 301k in Jan-22 according to ADP data marking the first decline in more than a year. • The unexpected decline came as the US grappled with the new wave of Covid19 cases.
• Yields on government bond tend to close lower yesterday. However the 10- year Bund yield remained in positive territory.
• On the data front, EA preliminary reading on inflation figure was recorded at 5.1% in Jan-22 significantly higher than consensus forecast at 4.4%.
Domestic Market Update
• The 10-year Indo GB yield closed unchanged at 6.42% on Wednesday (02/02/22) in line with our daily forecast range of 6.35-6.45%.
• The IDR value slightly appreciated against USD and was closed at IDR 14,357/USD (vs IDR14,383/USD in the previous day).
• Risk premium also decreased with Indonesia’s 5-year CDS stood at 82.37 bps (vs 90.41 bps previously).
• Government successfully raised IDR25tn funding through securities auction yesterday.
• The total incoming bids were IDR72.07tn. As we have expected, the incoming bids was lower than in previous auction at IDR84.84tn.
• Series that have highest demand from investor including FR0092 with the incoming bids of IDR15.76tn
• On the data front, Indonesia’s inflation rate in Jan-22 came at 2.18% YoY, the highest figure since May-20, lower than our expectation of 2.26% YoY and remain manageable.
• Indonesia manufacturing PMI also recorded an expansion in Jan-22 with the figure of 53.7 (vs 53.5 in Dec-21).
Market Projection
• Given the recent development, we expect the 10-year Indo GB yield to move within range of 6.35-6.45% today.
• Attractive Indo GB series to be traded today: FR0070, FR0084, FR0086, FR0082, FR0091.
Disclaimer On
