Global Market Update
• The benchmark 10-year UST yield was closed 2 bps lower to 2.15% on Friday (03/17/22).
• The Fed finally increase FFR for the first time in the last 3-years by 25 bps. US central bank also point out that balance sheet reduction is coming.
• Based on FOMC participants projection, the interest rate for 2022 is expected to be raised in the next 6 coming meeting.
• The Fed plan is in line with the market expectation. The riskier asset price such as stocks recorded gain last week.
• DJI was closed 0.8% higher, S&P 500 rose 1.17% and Nasdaq Composite jumped 2.05%.
• Elsewhere, UK central bank announced that it would be raising rates for a third consecutive meeting, meanwhile BoJ kept the interest rate unchanged.
• In China, PBoC also decided to hold monetary policy steady for its 1-year and 5-year loan prime rate each at 3.7% and 4.6% in Mar-22.
• On the other hand, Russia-Ukraine conflict has shown a little progress on their cease fire talks.
• Russia continues to attack Ukrainian cities, the latest report show that several of Russia’s missiles have hit an aircraft repair center in Lviv.
Domestic Market Update
• The 10-year Indo GB yield keep steady at 6.71%, while the 5-year Indo GB yield also stayed at 5.56% on Friday (03/18/22).
• The IDR value weakened against USD to the level of IDR14,343/USD last week (vs IDR14,303/USD in the previous day).
• Risk premium which is reflected by the 5-year Indo CDS was down from 92.86 bps to 87.96 bps.
• Bank Indonesia (BI) reported there was an inflows into domestic portfolio assets amounting IDR8.23tn in 14-17 Mar 2022.
• Foreign investors booked a net buy of IDR1.130tn in the government bond market, while at the same time recorded a net buy of IDR7.10tn in equity market.
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to keep steady within a range of 6.70-6.80% for today.
• Attractive Indo GB series to be traded today : FR0086, FR0090, FR000064, FR0078, FR0087, FR0091.
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