Global Market Update
• Majority yield on the benchmark of UST notes slightly increased last week.
• Yield on the benchmark of 10-year UST note rose 26 bps on a weekly basis to 3.75% on Friday (12/23/22).
• However, yield on the short term bond (UST 2-year) only increased 14 bps on a weekly basis and closed at 4.32%.
• Spread between 2/10 UST note yield narrowed to -57 bps last week vs -69 bps previous week.
• US equity market recorded a weekly gain. The DJI and S&P 500 each rose 1.36% and 0.71%, while Nasdaq Composite fell 0.46%.
• Cumulatively, Fed has increased benchmark interest rate by 425 bps throughout 2022.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) stayed at 6.90% on Friday (12/23/22).
• Risk perception as indicated by 5-year CDS remained steady at 90-100 bps.
• The IDR weakened against USD to 15,593/USD on Friday vs 15,583/USD on the previous day.
• According to Bank Indonesia, foreign investors booked a net inflows of IDR1.45tn in government bond market, and thus supporting the fixed income asset pricing.
• In addition, BI also reported that broad money supply (M2) increased 9.5% YoY in Nov-22, indicating that domestic liquidity remains aplenty.
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 : FR0077, FR0037, FR0047, FR0052, FR0054, FR0096.
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