Global Market Update
• The yield on 10-year UST note was steady at 3.68%, yet yield on 2-year UST note decreased 2 bps to 3.44% on Monday (11/28/22).
• Yield curve remains inverted with 2/10-year note yield spread stood at -76 bps to start this week.
• US equity market fell sharply yesterday. The DJI dropped 1.45%; S&P 500 was 1.54% lower and Nasdaq Composite declined 1.58%.
• Concern over Chinese demonstration against zero Covid-19 policy sparked a jitter to the market about China’s economic outlook.
• On the economic data front, EU broad money supply (M3) increased 5.1% YoY in Oct-22, lower than previous month growth of 6.3% YoY and consensus forecast of 6.2% YoY amid rising interest rate and threat of recession.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) remained flat at 6.94% on Monday (11/28/22).
• Despite ongoing market concern, yield on the benchmark 10-year Indo GB was consistently below 7% recently.
• Improving risk perception and the drop of 10-year UST note yield supported domestic GB market. However, IDR depreciation could limit further yield drop.
• Risk perception slightly improved but IDR depreciated against USD starting this week.
• Indonesia’s 5-year CDS now stood below 100 bps (vs previous week hitting above 110 bps).
• The IDR weakened against USD and was closed at IDR15,772/USD on Monday (vs IDR15,673/USD last week).
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 6.85-7.05% for today.
• Attractive Indo GB series to be traded today : FR0084, FR0037, FR0047, FR0073, FR0091, FR0096.
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