Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds were mixed, with the 5Y yield (FR104) edging up +2.0 bps to 6.47% while the 10Y yield (FR0108) declined -5.4 bps to 6.54%, resulting in a bull flattening of the 5Y–10Y curve by -7.4 bps, as INDOBeX rose 0.03%. Market sentiment was shaped by a combination of domestic policy developments and mixed global macro signals. Domestically, the government proposed higher royalty rates for key commodities including copper, gold, tin, and nickel, as part of efforts to strengthen state revenue amid elevated commodity prices and support President Prabowo’s priority programs. Meanwhile, Indonesia’s foreign exchange reserves fell to USD146.2bn in April, the lowest since July 2024, reflecting debt repayments and continued Bank Indonesia intervention to stabilize the rupiah amid global volatility. On a more positive note, domestic auto sales rebounded strongly after the Eid period, with April car sales jumping 55.0% YoY. In the US, labor market data remained relatively resilient, with nonfarm payrolls rising by 115k in April, above expectations, although broader indicators such as labor force participation and the U-6 unemployment rate pointed to some moderation beneath the surface. On the credit side, PNRE received an idAAA (stable) rating supported by Pertamina’s backing and its recurring renewable energy revenue stream, while PPRE’s idBBB+ (stable) rating was affirmed, underpinned by improving opportunities in the mining sector and its diversified business profile.