Global Market Update
• Yields on the benchmark UST note declined along the curve on the last trading day of previous week.
• The benchmark 10-year UST note yield fell 4 bps and closed at 3.82% on Friday (02/17/23).
• On the other hand, the benchmark 2-year UST note decreased slightly by 2 bps to 4.62% at the same time.
• Yields on the benchmark 2 & 10 year UST note still increasing by 10 bps and 8 bps respectively on a weekly basis.
• In spite of declining government bond yields, US stock market was mixed. The DJI gained 0.39% while S&P 500 and Nasdaq Composite dropped 0.27% and 0.58% respectively.
• PBoC kept the reference rate unchanged on Feb-23 meeting. Loan Prime Rate 1Y and 5Y were maintained at 3.65% and 4.3% respectively.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 4 bps to 6.72% on Friday (02/17/23).
• The benchmark government bond yield slight increased following the IDR depreciation and weakening CDS.
• The IDR weakened against USD and closed at IDR15,210/USD on Friday vs IDR15,159/USD on the previous day.
• Indonesia’s 5-year CDS inched up to 92.45 bps on Friday vs 90.12 bps on the previous day.
• Bank Indonesia (BI) reported a net outflows from SBN totaling IDR3.52tn during 13-16 February 2023.
• However, SBN market is still flooded with foreign portfolio inflows since the beginning of this year which recorded a net inflows of IDR45.4tn.
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 6.70-6.90% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0081, FR0037, FRFR0096, FR0072.
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