This week domestic bond market was under pressure reflected by Indonesia Composite Bond Index (ICBI) were drop -0.61% wow, led by a decline in the govvies performance by -0.68% wow. However, throughout the year ICBI’s performance still recorded positive performance by +10.02% ytd. The yield curve in the bearish form, rising yield dominate along the tenor with average yield increased +9.9bps wow. IndoGB 5-10 years tenor are the highest yield surge in range +14bps to +19bps of changes.
SR008 keep recorded as the most active series this week with a total frequency of 747 times and the volume reached IDR4.04trn. Meanwhile, the largest volume recorded by FR0056 which reached IDR12.7trn. FR0056 trading volume was increased by 34.1% wow driven by higher demand that is not absorbed at this week auction. The government has awarded IDR 13.4trn worth of govvies paper from IDR12trn of its indicative target at an auction this week. Until this week the government has raised IDR43.37trn of fund from 2Q2016 auction or 40.92% of total current quarter target.
Lack of sentiment earlier this week made a less active transaction, only driven by trading factor. On the weekend some negative sentiment overshadow the market, namely the US GDP growth data release that only recorded 0.5% annual rate below economist expectation and the slowest pace since the first quarter of 2014. In addition, rupiah depreciation to a level of IDR13,200/USD as well as BoJ’s decision not to further ease monetary policy drag a negative impact to domestic bond market this week.