Today’s Outlook:
The US market rose for the second consecutive day amid optimism that negotiations over raising the nation’s debt ceiling can be resolved in the next few days. In economic data release, Initial Jobless Claims fell to 242,000 (lower than expectations and the previous week), a sign of a tight labor market. Existing Home Sales (Apr.) fell to 3.4%, lower than forecast and the last period. About two-thirds of traders expect the Federal Reserve to pause its interest rate hikes at next month’s FOMC Meeting while officials asses how well their actions to date have done to cool inflation. Not all officials agree on a pause interest rate hike; given that the economy showed an easing inflation rate, this doesn’t justify a pause since the labor market remains tight. Furthermore, Fed Chairman Jerome Powell’s statement scheduled for later evening will undoubtedly become the market’s attention.

From Asia, Japan confirmed its 1Q23 GDP at 1.6% YoY, higher than the 0.7% forecast, and managed to reverse the situation from negative 0.1% in the previous quarter. Industrial Production (Mar.) also rose on a monthly basis to 1.1%. They also managed to post a Trade Balance (Apr.) of JPY -432.4 billion, a smaller deficit than expected or the previous month. Earlier today, Japan also released their National CPI & Core CPI (Apr.), which came in at 3.5% & 3.4% YoY respectively. While from Europe, German PPI (Apr.) figures will be awaited today, after the Eurozone previously reported CPI (Apr.) remains in line at 7% YoY.

Riding on the positive sentiment in the US markets, the Dollar rose to a 7-week high with the Dollar Index at 103.63, up 0.7% from the previous day’s 103.56. The 10 year US Treasury climbed another 0.03%, sending the yield to 3.657%.

Corporate News
IDR 207 M Cash, Pefindo Affirms Bussan Auto Finance’s Maturity Bond Rating at idAA PEFINDO reaffirmed the idAAA rating for PT Bussan Auto Finance’s Sustainable Bonds II Phase I Year 2022 Series A worth IDR 88.5 billion which will mature on July 15, 2023. BAFI’s readiness to pay off the maturing bonds is supported by its cash which equals to IDR 207.8 billion and unused loan facilities of around IDR 10.9 trillion as of March 31, 2023. (Emiten News)

Domestic Issue
RI Receives IDR 15 Trillion from Government Bond Auction The Ministry of Finance recorded a total bid of IDR 65.45 trillion in the auction of Government Bonds (SUN) on Tuesday (16/5), higher than the previous auction of IDR 44.99 trillion. However, the government ended up deciding to win IDR 15 trillion in demand. In this auction, the majority of investor demand was for the 10-year SUN series, namely the FR0096 series. The total bid reached IDR 23.52 trillion or 35.9% of the total incoming bids. (Bareksa)

US10YT broke the Resistance of its Bottoming pattern and has the opportunity to continue towards the TARGET yield around the 3.866% level. ADVISE: Average Up accordingly. ID10YT extended its decline after being unable to hold on to the previous Low support, bringing the 6.402% level as the closest Resistance at the moment. ID10YT must at least be able to break above MA10 Resistance / 6,432% in order to stop this yield downtrend; followed by MA20, which is now at 6,508%. ADVISE: Hold, Wait & See.

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