Global Market Update
• Yields on UST note dropped 3-12 bps along the curve on Wednesday (05/18/22).
• The benchmark 10-year UST note yield fell 9 bps to 2.89% during stock market sell off.
• US equity market tumbled. DJI fell -3.57% while S&P 500 and Nasdaq Composite lost more than -4%.
• Tech heavy Nasdaq Composite came at worst after dropping 4.73% in a single day trading.
• Risky asset continue to suffer amidst Fed monetary tightening cycle.
• Fed’s Chair Jerome Powell said that US central bank will continue to raise interest rate until inflation to slow down.
• During recent market turbulence, investors are flocking to safe haven assets such as government bond causing yields to decline.
Domestic Market Update
• Yield on 10-year Indo GB was flat around 7.30% onn Wednesday (05/18/22), in line with our expectation.
• The IDR continued to weaken against USD and was closed to IDR 14.688/USD, the lowest in a year.
• Indonesia 5-year CDS was closed at 108.16 bps yesterday.
• Residential Property Price Index (IHPR) grew by 1.87% YoY in 1Q22, higher than 4Q21 which recorded a growth of +1.47% YoY.
• The improvement in residential property prices is in line with the improving sales performance although it is still in the contraction zone. Residential property sales were recorded at -10.11% YoY in 1Q22 (vs. -11.60% YoY in 4Q21).
Market Projection
• Given the recent development on global and domestic market and after a high yield spike, we expect the 10 year Indo GB yield to keep steady within a range of 7.20-7.40% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0064, FR0078, FR0091, FR0068, FR0072.
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