Global Market Update
• The global economic recovery remained solid. However the pace of manufacturing activity somewhat decelerated in August-21.
• The impact of Delta variant widespread has dampened the factory activity. PMI manufacturing figures across Europe, Asia and U.S. declined in August21 compared to previous month, despite still in an expansionary zone.
• U.S. Markit Manufacturing PMI came to 61.1 points last month. This 2.3 points below previous month figure.
• U.S. reported a lower than expected jobs market in August-21 as ADP employment change recorded only 374k below market consensus of 613k.
• The 10 year U.S. treasury yield closed flat at 1.3%. The overall yields moved 1-2 bps along the curve.
• U.S. equity market closed mixed. DJI dropped by 0.14%, S&P 500 nearly flat with 0.03% appreciation while Nasdaq Composite gained 0.33% last night.
• WHO is now strictly monitoring the ‘mu’ Covid-19 variant which could possibly evade the immunity. This variant was found in Colombia and now has been confirmed in 39 countries.
Domestic Market Update
• Indonesia’s manufacturing activity recorded a contraction of 2 consecutive month amid the implementation of PPKM in July-August 2021. Markit Manufacturing figure was at 43.7 points.
• The domestic inflationary pressure remained benign as the annual CPI was reported to hike 1.59% YoY in August-21, in line with our expectation and market consensus.
• Domestic financial market saw a correction yesterday. JCI declined 0.97%, rupiah was depreciated 0.11% against USD and the 10 year Indo GB yield rose 2 bps to 6.09%.
• However, the upward pressure on bond yields remained low due to macroenvironment that is set to be accommodative along with low external pressure.
Market Projection
• Given the U.S. treasury yield limited movement, the 10 year Indo GB yield will likely to move within range of 6.10%-6.20% on Thursday (09/02/21).
• The attractive government bond series to be traded are : FR0086, FR0064, FR0082, FR0087, FR0068, FR0072 and FR0083.
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