European Central Bank policymakers are reportedly considering a slower pace of interest rate hikes. The 50 basis-point increase in February signaled by ECB President Christine Lagarde remains likely, but the possibility of a smaller 25-point rise in March is possible. This matter is based on the premise that the inflation rate is seen to ease in the euro area as the natural gas prices fall and the potential of a more dovish move by the US Federal Reserve. Meanwhile, US Treasury’s long-term yield began to rise as investors monitored the Bank of Japan meeting outcome and prepared for a possible increase in corporate bond supply. Japan’s 10-year sovereign bonds have surpassed the BOJ’s policy ceiling for 3 consecutive sessions, underpinned by the speculation that the Japan central bank will loosen its control over the yield curve. If this happens, Japan’s Treasury will become more attractive than UST, especially for the foreign currency hedging factor.
Corporate News
Mayora Indah Will Pay Overdue Debts on April 2023. PT Mayora Indah Tbk (MYOR) has bonds maturing shortly. PT Pemeringkat Efek Indonesia (Pefindo) assesses that MYOR can pay its overdue debt on April 24, 2023. Therefore, Pefindo affirmed that idAA’s rating for PT Mayora Indah Tbk’s sustainable bonds I phase III 2018 is worth IDR500 billion. Moreover, Mayora’s management will pay off the maturity bonds with internal cash. (Kontan)
Domestic Issue
Through the Directorate General of Budget Financing and Risk Management (DJPPR), Ministry of Finance, the government sets the coupon or yield of the SBR012 series of Retail Savings Bonds (SBR), which has two types: SBR012-T2 and SBR012-T4. The SBR012 coupon is floating with floor or floating with a minimum limit. The SBR012 issuance is special this time since it offers two coupons for two different tenors. According to the DJPPR’s announcement, the coupon of SBR012-T2, which has a 2-year tenor, is 6.15% per year, and the coupon of SBR012-T4, with a 4-year tenor is 6.35% per year. (Bareksa)
Recommendation
ID10YT yield rebounded quite tensely after touching the Support area of 6.71. Currently, the yield is facing MA10 & MA20 Resistance in the area of 6.86-6.897. A break above the level will bring the yield to the next target, which is MA50 at 6.95, up to 7.0 as the psychological level. ADVISE: gradual Average Up after several Moving Average Resistance. On the other hand, US10YT still seems to be struggling to break the MA10 Resistance or move above the 3.54 yield; in order to free up the pace of yield towards 3.63-3.66 at MA50 & MA20 Resistance range. ADVISE: gradual Average Up.
Download full report HERE.
