Global Market Update
• US financial markets were closed on Monday (02/20/23) commemorating Washington’s birthday.
• Before the holiday, yields on the benchmark UST note increased along the curve.
• In response to rising yields of the government bond, US stock market fell with DJI and S&P 500 dropping by more than 1% on a weekly basis.
• Russia reported its GDP contracted -2.1% in FY22 amidst the war. The figure was still better than broad major forecast.
• In Asia, a positive catalyst for stock market came from PBoC monetary policy. The Chinese central bank decided to keep the interest rate unchanged to stimulate the economy.
Domestic Market Update
• Yield on the benchmark 10-year (FR0096) decreased 2 bps to 6.70% starting this week.
• The IDR strengthened against USD and closed at IDR15,159/USD on Monday vs IDR15,210/USD last week.
• Indonesia’s 5-year CDS stayed above 90 bps and was closed at 92.66 bps yesterday, slightly higher than last week position at 92.45 bps.
• Bank Indonesia (BI) reported a BoP surplus of USD4.7bn in 4Q22, reverting previous quarter result which booked deficit of USD1.3bn.
• The BoP surplus was driven by CA surplus and improving capital and financial account balance.
• Indonesia’s CA balance posted a surplus of USD4.3bn or equivalent to 1.3% GDP on the back of trade balance surplus in 4Q22.
• Overall, Indonesia’s CA surplus recorded USD13.2bn in FY22 or equivalent to 1.0% GDP. The result was higher than a surplus of USD3.5bn (0.3% GDP) in FY21.
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, FR0096, FR0072.
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