Federal Reserve chair Jerome Powell set a 25 bps benchmark rate hike, bringing the FFR to a range of 4.5%-4.75%, the highest level since 2007. The Fed also acknowledged that inflation was starting to ease and disinflation had started to happen but still emphasized that the interest rate be increased further and remain elevated at least through 2023 (between 5%-5.25% as per December projections); without derailing the “modest” economic growth and “robust” job gains. This assumption was supported by the latest economic data, which revealed an unexpected rise in job openings as US JOLTS Job Openings (Dec.) came in at 11.012 million (vs. forecast 10.250 million, vs. previous 10.440 million); while ISM Manufacturing PMI (Jan.) appeared more contractionary at 47.4 (vs. forecast 47 & vs. previous 48.4) as high prices suppressed demand. After the press conference, money markets were betting on a terminal rate of 4.892% in June (from 4.92% previously) and rest at 4.4% by the end of December this year. Meanwhile, the 2-year Treasury yield, with the most sensitive maturity to Fed policy, fell sharply by 10 bps to 4.1%. The US Dollar also weakened against several other major world currencies. The Fed stated that the next interest rate hike would be implemented in fractions of 25 bps but still emphasized that the inflation rate target to be achieved is at the level of 2%.

Corporate News
Fitch Ratings Assigns AA+ Rating to TBIG Bonds. Fitch Ratings Indonesia has assigned the bond issuance of PT Tower Bersama Infrastructure Tbk’s (TBIG) with a BBB-/AA+(idn)/Stable rating up to IDR2.5 trillion ‘AA+(idn)’ Long-Term National Rating. The bonds will be the sixth phase of the company’s IDR15 trillion bond program, and all net proceeds will be used to refinance its subsidiaries’ debt. (Emiten News)

Domestic Issue
The government will hold an auction of Sharia Securities (SBSN) or state sukuk on February 7, 2023. This auction aims to fulfill part of the financing target in the 2023 State Budget (APBN). The indicative target for next week’s state sukuk auction is IDR 14 trillion. The underlying assets in the sukuk auction are projects or activities in the 2023 State Budget and State Property. The SBSN to be auctioned are the State Treasury Securities – Sharia (SPN-S) and Project Based Sukuk (PBS) series. (KONTAN).

ID10YT is continuing its downtrend, with an orderly retreat when it touched the upper channel Resistance area at yield 6,805 yesterday. The closing position is also lower than the first Support: MA20 / 6.76, opening a more significant opportunity for ID10YT yield to continue going down & testing the following Support at MA10 / 6.69. ADVISE: Hold; Buy on Weakness 6.69-6.62. US10YT yield tested the medium-term Support exactly at the Low of 3.387 yesterday; therefore, the status is considered a very SPECULATIVE BUY. US10YT will only end this Bottoming phase & save the ongoing uptrend when it is able to climb back above the third Moving Average or Resistance 3.48-3.58. NHKSI RESEARCH suggests to WAIT & SEE for a while to confirm that the current Support level is strong & could result in a technical rebound.

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