Global Market Update
• The benchmark 10-year UST note yield increased 3 bps to 4.05% on Monday (10/31/22).
• On the other hand, the benchmark for short term rate of 2-year maturity increased 7 bps to 4.49% at the same time.
• Yield curve inversion widened and the spread of 2/10 year benchmark stood at -42 bps yesterday (vs -40 bps last week).
• US equity indices fell starting this week. The DJI was down 0.39%; S&P 500 fell 0.75% and Nasdaq Composite dropped 1.03%.
• EU inflation increased 10.7% YoY in Oct-22 based on flash reading. Euro Area inflation continued to break record high level beating consensus estimate of an increase 10.2% YoY.
• On the other hand, market participants also expect Fed will raise another 75 bps in Nov-22 with 78.2% probability based on CME FedWatch tool.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) stayed flat at 7.51% on Monday (10/31/22).
• Risk perception improved, but IDR still depreciating against USD.
• Indonesia’s 5-year CDS stood at 138.38 bps after hitting above 150 bps level last week.
• The IDR weakened against USD and was closed at IDR15,598/USD on Monday (vs IDR15,554/USD last week).
• Indonesia's Manufacturing PMI in Oct-2022 remains expansive despite dropping to 51.8 points (vs. 53.7 points in Sep-2022).
• On the other hand, Indonesia’s inflation is expected to increase 6% YoY in Oct-22.
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 7.45-7.65% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0081, FR0064, FR0095, FR0091, FR0065, FR0088.
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