Market players were shocked by the hotter-than-expected non-farm payroll data for September (336,000, Cons: 170,000; see Global Economic News). The data triggered another UST sell-off, as reflected by the UST 10 yield, which went up by 17 bps to 4.87% when the market opened, before ending the session at 4.8% (8 bps). Meanwhile, the S&P bond index for developed markets and EMBI for emerging markets fell by (-0.2%) and (-0.3%), respectively. However, the US stock market index spiked by 0.8-1.6%, followed by a 0.7% increase in the Goldman Sachs-S&P commodity index. We believe these movements indicate market players' skepticism regarding the bearish trend in the global market due to the increase in the UST 10Y yield. It is possible that the UST 10Y yield will peak at 4.8-5% if the impact of the global oil surge on inflation is relatively insignificant. The market is waiting for the release of September CPI inflation data next Thursday (10/12) to confirm the possibility. We project the INDOGB 10Y yield to move up to 7-7.1% today, while Rupiah might consolidate at IDR 15,550-15,650 per USD.

Fixed Income News: DOID carried out a buyback of US dollar-dominated bonds with a budget of USD 20.4mn. The buyback was carried out by PT Delta Dunia Makmur (DOID) through its subsidiary PT Bukit Makmur Mandiri Utama (BUMA). For information, the bonds will mature in 2026, with a principal value of USD 400mn and an interest coupon of 7.75% per annum. (Emitennews)

Global Economic News: US labor market expansion continues, as reflected by the hotter-than-expected September non-farm payroll data, which came in at 336,000 (Aug: 227,000; Cons: 170,000). Meanwhile, the workforce participation rate remained at 62.8%, and the unemployment rate stayed at 3.8% (Aug: 62.8% and 3.8%; Cons: 62.8% and 3.7%). However, average hourly wage growth fell slightly to 4.2% yoy (Aug: & Cons: 4.3% yoy). In our opinion, the data increases the risk of a Fed rate hike in 4Q23, though this still needs to be confirmed by September CPI inflation and October labor market data. (CNBC)

Domestic Economic News: BI’s foreign exchange reserves fell to USD 134bn in September (Aug: USD 137.1bn), and liquid foreign exchange reserves also fell to USD 121.7bn (Aug: USD 123.7bn). The figure is equivalent to 5.5 months of imports or 5.4 months of imports and short-term foreign debt payments. We believe that the decline in foreign exchange reserves in September was mainly caused by Bank Indonesia's direct intervention in the foreign exchange market to prevent worse Rupiah depreciation. (Bank Indonesia)

Recommendation: FR0040, FR0050, FR0068, FR0100.