SUN market was under pressure at the beginning of the week, as the depreciation of the rupiah approached the psychological level of IDR 14,700/USD. The USD index
strengthened to 105.0 levels following the release of US May high CPI inflation data (1.0% MoM; 8.6% YoY), and amid the Hawkish stance of the Fed this end of 2Q22. The benchmark 10-year SUN FR0091 recorded a yield increase of more than 15bps to 7.33%. From a global perspective, investors are looking forward to data on inflation at the producer level, as the limited supply of raw materials, plus the energy crisis, will depress company margins. US May Final Demand PPI is projected, posting inflation of 0.8% MoM (Vs. Apr. 0.5% MoM) and 10.8% YoY (Vs. Apr. 11.0% YoY). This data is released ahead of the June FOMC Rate Decision meeting, which is projected to raise the FFR to 1.25%-1.50%.
Download full report HERE.