Global Market Update
• The benchmark 10-year UST note yield was nearly flat at 4.04% on Tuesday (11/01/22).
• On the other hand, the benchmark for short term rate of 2-year maturity increased 6 bps to 4.55% at the same time.
• Yield curve inversion widened and the spread of 2/10 year benchmark stood at -51 bps yesterday (vs -42 bps previous day).
• US equity indices recorded a decline. The DJI decreased 0.24%; S&P 500 dropped 0.41%; Nasdaq Composite fell 0.89%. US equity indices gain in Oct- 21 reversed.
• Market participants will remain focus on Fed meeting this week. There is a probability of 83.5% that US central bank will hike another 75 bps in Nov-22.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) dropped 5 bps to 7.46% on Tuesday (11/01/22).
• Risk perception improved, but IDR still depreciating against USD.
• Indonesia’s 5-year CDS stood at 136.60 bps (vs 138.38 bps on Monday).
• The IDR weakened against USD and was closed at IDR15,628/USD on Monday (vs IDR15,598/USD previous day).
• Government has conducted SBSN auction yesterday. The incoming bids were only IDR4.32 tn (vs IDR6.40tn on October 18 auction).
• The amount of awarded bids were also lower than indicative target set at IDR5tn. Total awarded from the 6 series of SBSN was only IDR1.37tn.
• On the data front, Statistics Indonesia reported a deflation of 0.11% occurred in Oct-22, bringing annual domestic CPI at 5.71% YoY, lower than previous month at 5.95% YoY.
• However, core CPI increased 3.31% YoY in Oct-22, higher than the previous month rate at 3.21% YoY.
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 7.40-7.60% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR0081, FR0064, FR0095, FR0091, FR0065, FR0088.
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