The 10-year Govt Bond Yield has begun to Show an Increase

After the 10-year Govt bond yield reached its lowest level since Apr 2020, at 6.7% on Aug 25, the trend of the 10-year Govt bond yield has begun to show an increase, with the last level being 6.97% on Sep 11, 2020, growing by 4bps from Sep 4. This growth is in line with the 10-year Indonesian CDS, which increased by 5 bps from 4 Sep to 158 bps on 10 Sep 2020. The Rupiah exchange rate against the USD also weakened by 0.95% in the past week, to a level of Rp14,890 per USD on 11 Sep.

Euro zone govts must keep spending heavily to aid the bloc’s recovery from its historic pandemic-induced recession, complementing already super-easy monetary policy, ECB President Christine Lagarde said on Sunday. With debt levels blowing past 100%of GDP this year, concerns are rising that politicians will struggle to push through more support and some subsidies, raising the risk that employment and income schemes could abruptly end. (Reuters)

Markets are looking to the Fed to be a soothing force when it meets in the week ahead, but stocks could remain choppy if the central bank disappoints and as investors focus on the election and the economic recovery. The Fed’s two-day meeting is expected to end Wednesday with minor tweaks to its statement and some clarity on how it plans to use forward guidance. (CNBC)

Source: Danareksa Sekuritas Debt Research

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