Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds staged a modest recovery, with the 5Y yield (FR104) declining 8.3bps to 6.68% and the 10Y yield (FR0108) falling 3.5bps to 6.72%, resulting in a steepening of the 5Y–10Y curve by 4.8bps, while the INDOBeX Composite edged up 0.01%. Market sentiment improved slightly after President Trump said the US had postponed planned strikes on Iran following appeals from Saudi Arabia, Qatar, and the UAE, as Gulf nations pushed for a diplomatic resolution to the conflict. Trump added that discussions with Tehran remain ongoing and reiterated that any agreement must ensure Iran does not obtain nuclear weapons. Domestically, attention remained on the rupiah after reports emerged that Indonesia is considering tighter state control over commodity exports, including coal and palm oil, through a new entity supervised by Danantara. The policy aims to curb under-invoicing, strengthen foreign exchange inflows, and boost state revenues amid continued pressure on the currency, although investors remain cautious over the potential impact of greater government intervention on commodity trade flows and market sentiment. In the US, ADP data showed private employers added an average of 42,250 jobs per week in the four weeks through May 2, up from 33,000 previously, signaling continued resilience in the labor market despite broader signs of economic moderation. Meanwhile, Indonesia’s latest SBSN auction recorded solid demand, with IDR18.8tn in incoming bids and IDR12.0tn awarded, translating to a bid-to-cover ratio of 1.57x. Demand was particularly strong for the PBS038 and SPNS03022027 series, highlighting continued appetite for long-duration government sukuk despite ongoing market volatility.