Today’s Outlook:
Optimism and relief are expected to be the dominant sentiments for investors on Monday, as Washington reaches a tentative agreement on the US debt ceiling, removing the risk of a default that could potentially rock the global financial world. Trading and market liquidity in Asia is expected to be lighter than usual, but with  US and UK markets closed for the holidays, there is potential for great volatility. This positive sentiment is expected to persist in the market for the short term, before investors return to monitoring Inflation data and the possibility of a rate hike at the upcoming June FOMC Meeting.

The latest economic data release from the US on Friday reported that Core Durable Goods Orders (Apr.) growth on a monthly basis fell to minus 0.2% mom, while the Core PCE Price index (Apr.) which is the Federal Reserve’s favorite inflation indication rose 0.4% mom. Personal Spending (Apr.) also increased twice as much as projected to 0.8% mom. Michigan Consumer Expectations & Sentiment (May) moved further towards expansionary at 55.4 & 59.2 respectively. The Dollar Index, which measures the strength of the USD against other major world currencies, was solid at 104.26, a 2-month high.

Corporate News
Due July 2023, Pefindo Rates Adi Sarana (ASSA) Bonds idA- PEFINDO affirms the “idA-” rating for PT Adi Sarana Armada Tbk’s (ASSA) Convertible Bonds I/2021 worth IDR 517.3 billion which will mature on July 27, 2023. If not converted into shares, ASSA will fully pay off the maturing convertible bonds using internal cash of IDR 200 billion and funds from bank loans of IDR 317.3 billion, wrote Pefindo in a release on Friday (26/5). (Emiten News)

Domestic Issue
Ministry of Finance Reveals Development of Regional Bonds, Hampered by Pandemic The Ministry of Finance revealed that the issuance of regional bonds has not been successful due to substitute loans from the state treasury. Director of Government Bonds at the Directorate General of Financing and Risk Management of the Ministry of Finance (DJPPR Kemenkeu) Deni Ridwan said that a number of regions have prepared sufficiently for the issuance of regional bonds. At the same time, regulatory tools to support are also addressed. However, the issuance has been delayed due to the Covid-19 pandemic. According to Deni, initially the obstacle to the issuance of regional bonds was the different auditors used on the Indonesia Stock Exchange, which was later later resolved. As the pandemic subsides, Deni said that the Ministry of Finance is again encouraging the issuance of regional bonds as one of the financial instruments provided for development. (Bisnis)

US10YT has shown three Doji approaching the Resistance area, but so far it has not been confirmed by a red candle. So the course still looks quite stable towards the TARGET yield around the 3.877% / 3.97-4.0% level. Pay attention to MA10 / 3.733% Support as Trailing Stop of this yield uptrend. ADVISE: Buy, or Average Up accordingly. ID10YT is slowly trying to break MA10 & MA20 Resistance, making 6.446% yield the closest Resistance at the moment. A break of that level will bring ID10YT to attempt the next Resistance which is the upper channel (downtrend) at 6.5% which will potentially free it from this downtrend. ADVISE: Hold; or Average Up accordingly.

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