Indonesia Credit Rating Upgrade. What now?

From the eye of investors, the credit rating is one of the KPIs (Key Performance Indicators) for one country’s risk assessment analysis. While it does promote an upbeat, there seems to be certain outstanding political risks that needs further assessments.

Following US politics uncertainty last year, we can identify certain top levels from following the countries 10-years government bond instruments:

As we can see below, despite some bullish indications after gaining some grounds in Q4-16/Q1-17, the downside momentum from last year for 3 of the above-mentioned countries have not fully recovered yet if comparing to the last year’s tops, just before 2016’s US election.

With the least performer compared to other peers in this technical analysis approach, the bullish sentiment should grow quite soon given the recent credit rating upgrade and the fact that Indonesia’s 10-years government bond just broke above 100 (round/psychological and previous resistance levels). We could expect some upbeat moves going forward.

About Giorevinus Simarmata 1 Article
Giorevinus is a product controller of equity derivatives and commodity derivatives business unit trading desk at Rabobank Utrecht. He's an avid market observer and earned his double degree program on quantitative economics from the prestigious Erasmus Mundus.

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