Global Market Update
• The benchmark 10-year note yield increased 5 bps to 3.88% on Friday (10/07/22).
• On the other hand, the 2-year benchmark yield increased 5 bps to 4.31% at the same time.
• Spread between 2/10-year UST note yield was at -43 bps, remaining the same from the previous day position.
• Following the rise in the risk free rate, US stock market fell sharply last week.
• The DJI declined 2.11%; S&P 500 fell 2.80%, whilst Nasdaq Composite lost 3.80%.
• Market participants now await FOMC minutes of meeting and US Sep-22 inflation figure this week.
Domestic Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 4 bps to 7.22% on Friday (10/07/22).
• The increase in the local currency benchmark government bond yield was in-line with IDR depreciation and weakening risk perception.
• Indonesia’s 5-year CDS increased to 153.79 bps last week. CDS figure was consistently above 150 bps.
• The IDR depreciated against USD and was closed at IDR15,251/USD on Friday (vs IDR15,188/USD on Thursday).
• Indonesia FX reserves position decreased USD1.4bn to USD130.8bn in Sep-22.
• The decline in FX reserves position was driven by external debt payment and IDR stabilization. Fx reserves position is currently equal to 5.9 months of imports.
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 7.15-7.35% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0081, FR0090, FR0064, FR0095, FR0082, FR0087, FR0091, FR0096.
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