Yield inversion patterns in UST2Y (3.35%) and UST10Y (3.36%) were formed, one of the indicators of recession. Even though there is no negative spread yield yet, UST2Y yield rose +30bps, more aggressive than UST10Y which was up +20bps.
Ineffective in May, speculation of a 75 bps July FFR hike. May high inflation (1.0% MoM; 8.6% YoY), breaking March peak inflation expectations (1.2% MoM; 8.5% YoY), convinced the Fed to be more Hawkish coming 3Q22.
Ineffective in May, speculation of a 75 bps FFR hike in July. May’s high inflation (1.0% MoM; 8.6% YoY), busting expectations of peak inflation in March (1.2% MoM; 8.5% YoY).
Optimistic IKK sentiment and China’s trade surplus, colored the SUN trade yesterday. The BI IKK for the May period rose significantly to 128.9 (Vs. Apr. 113.1), as people’s mobility will drive economic recovery.
ECB rate hike signal raised investors’ concerns ahead of US CPI data. ECB will end quantitative easing on July 1, raise interest rates by 25 bps at the end of July, and potentially be more aggressive in September.
Profit taking pushes yield FR0091 up 14 bps. Investors took advantage of Cadev Indonesia’s positive sentiment for the May period, which was maintained at USD 135.6 billion.
UST10Y was traded with a yield of 3%, and the price of Brent crude oil broke through the level of USD 120/barrel, potentially revising the inflation outlook and increasing FFR. The S&P 500 fell more than 1%, snapping a two-day rally. The Dow Jones and Nasdaq indexes closed down 0.8% and 0.7%, respectively.
Core inflation was maintained, and price in of FFR increase in June, boosted Wall Street upwards. The survey showed that core inflation, or US CPI Ex Food and Energy for May period was still under control, or at 0.5% MoM (Vs. Apr. 0.6% MoM) and 5.9% YoY (Vs. Apr. 6.2% YoY).
Based on DJPPR data, the number of bids that entered the SUN auction was IDR 43.5 trillion, or higher than the previous auction of IDR 39.42 trillion
