Global Market Update
• The yield on 10-year UST dropped 14 bps to 3.61% on Wednesday (11/30/22).
• Yield declined after Fed’s Chair Powell made a statement that moderating the pace of rate increase is make sense.
• US equity market jumped significantly in response to the yield drop. The DJI rose 2.18%; S&P 500 was up 3.09% and Nasdaq Composite lead the gain with 4.41% appreciation.
• US Private market recorded an increase of 127k jobs in Nov-22 below consensus forecast of 200k and the least since Jan-21, mainly driven by interest rate sensitive sector like construction, professional/business services, financial activities, and information.
• The US economy grew an annualized 2.9% on quarter in Q3 2022, better than an initial estimate of 2.6%, and beating forecasts of 2.7% reflecting upward revisions to consumer and business spending and net trade.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) dropped 3 bps to 6.91% on Wednesday (11/30/22).
• Despite ongoing market concern, yield on the benchmark 10-year Indo GB was consistently below 7% recently.
• Improving risk perception and the drop of 10-year UST note yield supported domestic GB market. However, IDR depreciation still limiting further yield drop.
• Indonesia’s 5-year CDS stood at 92.80 bps. Indonesia’s 5-year CDS was consistently below 100 bps.
• The IDR strengthened against USD and was closed at IDR15,732/USD on Wednesday (vs IDR15,743/USD on the previous day).
• Indonesia’s annual inflation rate is expected to increase by 5.50% YoY in Nov-22. On a monthly basis, CPI is forecasted to rise by 0.16% MoM.
• BI foresees Indonesia’s GDP will grow by 4.5 – 5.3% in FY22F, whilst CPI could stabilize to 3,0±1%.
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 6.85-7.05% for today.
• Attractive Indo GB series to be traded today : FR0084, FR0037, FR0047, FR0073, FR0091, FR0096.
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