Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds remained under pressure, with a bear flattening in the 5Y–10Y segment as the 5Y yield (FR104) rose +9.8 bps to 6.52% and the 10Y yield (FR0108) increased +4.5 bps to 6.75%, narrowing the spread by -5.3 bps, while INDOBeX fell 0.25%. The cautious tone was driven by escalating geopolitical tensions, as the US intensified pressure on Iran through its naval blockade, while ceasefire developments in the region provided only limited relief. Domestically, sentiment was steadied after authorities clarified that there are no plans to impose tolls on ships transiting the Strait of Malacca, reaffirming Indonesia’s commitment to open and free sea lanes. In the US, the Federal Reserve’s balance sheet expanded modestly by around USD11.8bn WoW to USD6.71tn, indicating a gradual increase in liquidity, though still well below its 2022 peak. On the credit side, APIA is set to repay its IDR900bn Jun-2026 bonds using Ijarah funds, supported by strong cash reserves, while JPFA has been placed on Rating Watch Positive, reflecting expected improvements in parent transparency, although exposure to input costs and poultry price volatility remains.