Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds recovered modestly, with the 5Y yield (FR104) declining -4.0 bps to 6.60% and the 10Y yield (FR0108) falling -5.3 bps to 6.67%, resulting in a mild bull flattening of the 5Y–10Y curve by -1.4 bps, while INDOBeX rose 0.15%. The macro backdrop remained cautious as the Trump administration allowed a waiver permitting limited purchases of Russian crude to expire, effectively reinstating restrictions on certain Russian oil cargoes despite ongoing tightness in global energy markets caused by the Iran conflict and disruptions in the Strait of Hormuz. Domestically, Bank Indonesia reiterated its commitment to “smart interventions” across spot, domestic, and offshore FX markets to stabilize the rupiah after the currency weakened beyond IDR17,500/USD, with the central bank expecting seasonal dollar demand from debt repayments, dividend repatriation, and Hajj-related outflows to gradually ease. In the US, initial jobless claims rose slightly above expectations to 211k in early May, although overall labor market conditions remained relatively resilient with layoffs still low by historical standards. On the credit side, OPPM is expected to repay its upcoming bond and sukuk maturities using internal funds supported by solid liquidity, while SMFP also plans to repay its maturing bonds through internal cash resources backed by a strong cash position.