Global Market Update
• The 10-year UST yield jumped 3 bps to 2.86% to start this week (04/18/22).
• Yield on US government bonds rose 1-3 bps along with the ongoing concern on inflation outlook that trigger aggressive tightening from the Fed.
• US equity market recorded a slight correction yesterday during earning release momentum.
• DJI was down 0.11%; S&P 500 slipped 0.02% while tech-heavy Nasdaq fell 0.14%.
• The World Bank cuts its global GDP growth for FY22F by 90 bps from 4.1% to 3.2% amid ongoing concern of Russia-Ukraine conflict.
• China reported a GDP expansion by 4.8% YoY in 1Q22, beating consensus estimate at 4.4%.
• China’s industrial production also rose 5% YoY in Mar-22, well above market projection at 4.4%.
Domestic Market Update
• Yield on 10-year Indo GB increased to 6.96% on Monday (04/18/22) or +6 bps above our target range.
• The IDR strengthened against USD and was closed at IDR 14.356/USD yesterday (vs IDR14,381/USD last week).
• Risk premium which is reflected by the 5-year Indo CDS jumped to 100.04 bps from 88.18 bps.
• Indonesia reported the highest exports & imports value in history. Export grew 44.36% YoY while import rose 30.85% YoY. The figures were above consensus estimate at 28.3% YoY and 18.3% YoY.
• Trade balance marked another surplus of USD4.53bn and Indonesia booked 23 straight months of trade surplus thanks to higher commodity price.
Market Projection
• BI is expected to keep interest rate steady at 3.5% amid ongoing concern on higher commodity price that will trigger inflation.
• Domestic inflation has been steadily low so far an IDR was stable, given a record of trade surplus.
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to keep steady within a range of 6.90-6.70% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0086, FR0090, FR0071, FR0078, FR0087, FR0091.
Disclaimer On
