New inflation indicators release from China, Germany, and the US hardened expectations that high-interest rates would be in force longer than expected. China’s Manufacturing Purchasing Managers’ Index (PMI) rose to 52.6 (Feb.) from 50.1 (Jan.), marking the fastest growth in more than a decade. In the US, prices for raw materials were recorded to rise to 51.3 (clearly higher than the forecast of 45.1 & Jan. figure of 44.5); suggesting inflation could remain elevated. Meanwhile, from Europe, the release of German CPI data (Feb.) still has not budged from the level of 8.7% and failed to meet expectations of a forecast down to 8.5%; confirming the level of Inflation in Europe also remains a challenge. In response to the US macroeconomic data, the 10-year US Treasury yield suddenly soared to 4.006%, returning to the position for the first time since November; while the two-year yield was at its highest level since 2007, at 4.889%.The two-year German sovereign bond yield also jumped to 3.2%, the highest since October 2008. Fed funds futures showed traders added to bets the U.S. central bank will raise its benchmark rate to a range of 5.5%-5.75% by September, from the current range of 4.5%-4.75%. This is in line with the views of several Fed officials who agreed that the rate hike could reach 50bps at the upcoming FOMC Meeting on March 21-22.

Indonesia’s annual inflation (Feb.) was reported to increase by 5.47% YoY from January’s 5-month low of 5.28% (also higher than the expected 5.44%). 5.28% (also higher than the 5.44% forecast). On a monthly basis, goods & services price growth crept up 0.16% in Feb. (vs. forecast 0.11%, vs. previous 0.34%). On the other hand, Core Inflation (Feb.) seems more manageable as it fell to 3.09% YoY (clearly lower than the consensus of 3.26% & previous month’s 3.27%).

Corporate News
Bonds Maturing, TBIG Prepares IDR 1.7 Trillion Funds PT Tower Bersama Infrastructure (TBIG) has prepared funds for the repayment of bonds that will mature on March 13, 2023 amounting to IDR 1.7 trillion. Director of PT Tower Bersama Infrastructure Tbk (TBIG), Helmy Yusman Santoso explained that his party has provided funds to pay off the principal and interest of the 4 bonds to bondholders. For the record, in 2023 TBIG must pay off a total of IDR 5.96 trillion for its maturing bonds. TBIG is also not refinancing to pay off the maturing bonds this year and will be repaid using the company’s internal cash. (BeritaSatu)

Domestic Issue
Sri Mulyani Earns IDR20 Trillion from 7 SUN Auctions Finance Minister Sri Mulyani has managed to obtain IDR 20 trillion in demand from the auction of seven government bonds (SUN) at the auction on Tuesday, February 28, 2023. The seven debt securities include the SPN03230531 series (new issuance), SPN12240229 (new issuance), FR0095 (reopening), FR0096 (reopening), FR0098 (reopening), FR0097 (reopening) and FR0089 (reopening) through the Bank Indonesia auction system. Director of SUN at the Directorate General of Financing and Risk Management of the Ministry of Finance Deni Ridwan said that investor interest is still solid, which is reflected in the total bid of IDR 45.97 trillion or twice the previous indicative target. This was driven by investors’ optimistic attitude towards the strengthening of the Indonesian economy for 2022 which was recorded at 5.31 percent on an annual basis. This achievement is higher than the previous year’s growth, which was 3.70 percent year-on-year (YoY). (Bisnis)

US10YT yield turned out to be more steady on the Uptrend, staying safely above the MA10 Support and breaking the 4% psychological level. Thus, it is possible for the yield to continue to rise towards the next TARGET: 4.243 / 4.338. ADVISE: Average Up accordingly. ID10YT looks giddy, holding in the Resistance / Target yield area that has reached around the psychological level of 7.0%. However, if the figure can be broken in the near future, it will open the way for further yield strengthening towards the next TARGET: 7.057 / 7.189-7.202. ADVISE: Set your Trailing Stop; Average Up accordingly.

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