Global Market Update
- On May 21st, 2024, the yield on the US 10-year Government Bond closed at a level of 4.412%, marking a decrease of 3.13 bps from the previous day.
- The yearly inflation rate in the UK moderated to 2.3% in April 2024, marking the lowest level since July 2021. This contrasts with March’s 3.2% and market expectations of 2.1%. Decreases in gas and electricity costs made the most significant negative impact on the monthly fluctuations in both CPIH and CPI annual rates. Conversely, motor fuels made the largest, albeit partly mitigating, positive impact, with prices increasing this year after a decrease a year ago.
- Japan’s 10-year government bond yield surged past 1% on Wednesday for the first time since May 2013 as traders intensified their speculation that the Bank of Japan would enact additional policy tightening this year.
Sources: UK Office for National Statistics, Bloomberg, Trading Economics and Binaartha.
Domestic Market Update
- On May 22nd, 2024, the Indonesia Government Bond Yield Curve for the 10-year bond closed at a level of 6.8787%, marking a decrease of 1.5 basis points compared to the previous day.
- The Bank Indonesia Governors’ Meeting on May 21-22, 2024, decided to keep the BI-Rate at 6.25%, the Deposit Facility rate at 5.50%, and the Lending Facility rate at 7.00%. This is to help keep inflation stable, aiming for 2.5±1% in 2024 and 2025. It is also to manage foreign capital inflows and keep the Rupiah stable.
- In April 2024, bank lending in Indonesia surged by 13.09% YoY, fueled by increased lending activity across various sectors like industry, business services, and trade, reflecting the growing economy. This robust demand for credit is influenced by supply-side dynamics, as banks sustain their appetite for lending.
Sources: PHEI, Bank Indonesia, and Binaartha.Market Projection
We predict the 10-year Indonesia Government Yield Curve will continue to move within range 6.4755% – 7.1572% for next Monday. Recommendations: FR0102, FR0089, FR0062, FR093, and FR0088.