Global Market Update
• US treasury notes yield fell as market dented with renewed recession fear given a loosening labor market condition.
• The benchmark 10-year UST note yield inched 8 bps lower to 3.34% on Tuesday (04/04/23).
• Equity index snapped their 4-consecutive days winning streak by losing more than 0.5% last night despite yield fell.
• US job openings stood at 9.93mn in Feb-23 marking the first time below 10mn since 2021.
• Milder than expected job opening may be a sign that US economy is decelerating firming the previous economic data such as manufacturing activity that contracted.
• Fear of recession has sparked market expectation that Fed would pivot soon in 2H23.
• Potential 25 bps rate cut in 2H23 has resulted in declining the value of USD and rising gold price.
• The DXY depreciated below 102 and hitting the lowest level since Apr-22 while gold price surged almost 2% to USD2,016/t oz, the highest since Mar-22.
Domestic Market Update
• The domestic LCY government bonds were traded up on Tuesday (04/04/23).
• Yield on the benchmark 10-year (FR0096) slightly fell 5 bps to 6.71% on Tuesday.
• The IDR continued to strengthen against USD and now approaching IDR 14,900/USD.
• In addition, Indonesia’s 5-year CDS has also finally dropped to below 100 bps again and currently stood at 92.19 bps.
• SBSN auction results : total incoming bids were at IDR24.77tn and awarded bids were IDR9tn.
• PBS036 was the most favored by investors with the total incoming bids IDR13.25 or nearly 54% from total incoming bids.
• Furthermore, investors appetite also slightly improved as incoming bids in yesterday’s auction were higher than in March 21, 2023 which only received IDR23.51tn bids.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 6.67-6.87% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0081, FR0084, FR0072, FR0079, FR0083.
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