Global Market Update
• U.S. reported retail sales grew by 0.7% MoM in August-21 after shrinking by 0.8% MoM in the previous month.
• The U.S. initial jobless claims as of September 11, 2021 recorded at 332,000. The number of jobless claims filling was higher than previous week at 312,000.
• However overall 4 week average of U.S jobless claims stood at 335,750 well below the previous period of 340,000.
• The 10 year U.S. treasury yield rose by 2 bps to 1.33%. We expect the benchmark yields tend to rise ahead of the Fed’s September policy meeting.
• Last night, ECB President Christine Lagarde said that the central bank would start conducting a moderately lower pace of net asset purchases under the PEPP for the rest of the year due to improved economic and financial conditions.
• The central bank reiterated the PEPP envelope would be maintained at EUR1.85tn until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.
• The U.S. stock market closed mixed. Both DJI and S&P 500 declined by more than 0.15%. Meanwhile at the same time Nasdaq Composite added 0.13%.
Domestic Market Update
• The 10 year Indo GB yield was nearly flat after rising only 1 bps to 6.13% on Thursday (09/16/21).
• The movement of 10 year Indo GB yield remained within our forecast range of 6.10%-6.20% so far.
• This was attributable to the limited movement of global government bond yields and low external pressure.
• The IDR value consistently stayed below IDR 14,300/USD while 5 year Indo CDS was stable below 70 bps.
• Investors appetite for domestic government fixed income assets remained high as reflected by high demand from the recent auction.
• Combined with central bank’s intervention, this justified the historically low yield of Indo GB.
Market Projection
• We still expect the 10 year Indo GB yield to move within range of 6.10%-6.20% on Friday (09/17/21).
• Attractive Indo GB series to be traded today : FR0086, FR0064, FR0071, FR0078 FR0082, FR0087, FR0065, FR0068, FR0080, FR0062 & FR0067.
Disclaimer
