The US Dollar index jumped 0.52% and the 2-year US Treasury yield crept up after strong jobs data last week pointed to the Federal Reserve that would still have a reason to keep interest rates high, while the yen eased after Japan’s new central bank governor, Kazuo Ueda, vowed to maintain ultra-loose policy; weakening the Yen by 1.08% at an exchange rate of 133.57/USD (had touched Yen 133.87/USD, the lowest level since March 15). The rising US Dollar dragged global Gold prices down below the psychological USD 2000 level, sliding 1.1% at USD 1989.10/ ounce; while sovereign bond yields climbed amid expectations of a rate hike at the upcoming FOMC Meeting on May 3rd.

Investors will focus on the release of US Inflation (Mar.) data tomorrow night at around 19.30 GMT, followed by FOMC Meeting Minutes, PPI (Mar.), and Initial Jobless Claims on Thursday. Market participants are starting to factor in a 71.7% likelihood that the Fed will raise the FFR by 25 bps to a range of 5%-5.25% next month, as reported by CME Group Fedwatch. On the other hand, recession worries have risen as commercial lending fell after the sudden collapse of Silicon Valley Bank in March tightened credit conditions among US banks; although the Fed’s emergency lending program has eased some of those concerns. It is known that Fed lending to banks over the past four weeks has increased more than USD 400 billion to ensure liquidity. Traders also are betting that the Fed will cut rates in the second half to ward off an economic downturn.

While from the Asia region, the market was colored by the rising geopolitical tension around the issue of China’s military training in the Gulf of Taiwan. The Chinese Inflation rate (Mar.) will be awaited by investors today with expectations still flat at 1%. Domestically, Indonesia’s foreign exchange reserves in March were recorded to be fattening at USD 145.20 billion, higher than expectations & the previous month. European markets, which will be open today after the Easter holiday, will be awaiting the Eurozone Retail Sales (Feb.) data. NHKSI RESEARCH estimates that sentiment rolling in the market will still tend to be flat as there is a likelihood that traders will hold back and wait for a series of important economic data releases from the US this week.

Corporate News
PT SMI Will Issue Sustainable Bonds III Under the PUB Sustainable Bonds III Sarana Multi Infrastruktur Phase III Year 2023 which is an integral part of the PUB Sustainable Bonds III that has been formed previously with a total facility of IDR 20 trillion, PT SMI opens up as much opportunity as possible to potential investors to participate in the issuance of bonds with an idAAA (Triple A) rating issued by Pefindo with a total issuance target of IDR 2 trillion in this phase III. The tenor and timeline are as follows: 1 Year Range: 5.70-6.30%; 3 Years: 6.50-7.25%; 4 Years: 6.50 -7.35%. (Liputan 6)

Domestic Issue
Corporate Bonds Still Attractive Until the End of the Year, Check out the Catalysts The issuance of corporate bonds in the second quarter of 2023 still attracts high interest due to several factors such as the Fed’s policy regarding interest rates, the year-end election situation, and Indonesia’s macroeconomic indicators. Bank Central Asia Chief Economist David E Sumual explained that investor interest is still quite good in corporate bonds and government bonds. David said that one of the factors affecting investor interest is the macro inflow indicator, which has been more than IDR 50 trillion from the beginning of the year for government bonds. David also said that macro indicators are quite strong, commodity prices are quite good so that it will also apply to bond issuance. Separately, Head of the Corporate Rating Division of Pemeringkat Efek Indonesia (Pefindo) Niken Indriasih said that the issuance of corporate debt securities in the second quarter of 2023 will remain in fairly good  conditions and is filled with optimism as in the first quarter of 2023. (Bisnis)

US10YT has attempted to break through MA10 Resistance at a yield of 3.4%, followed by MA20 at a yield of: 3.451%, supported by RSI positive divergence which states that buying momentum is picking up at this Support. ADVISE: Speculative Buy; or Average Up accordingly. ID10YT also appears to be about to end the short-term downtrend in this Falling Wedge pattern by breaking the Resistance of a series of MAs in the yield range: 6.801-6.819%. If the break out is possible, then ID10YT yield will continue its Uptrend to the 7.0% / 7.057% level; and finally reach the pending TARGET in the range of 7.189- 7.202%. ADVISE: Buy on Break; or Average Up accordingly.

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