Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds traded weaker, with the 5Y yield (FR104) rising 3.6bps to 6.68% and the 10Y yield (FR0108) climbing 2.6bps to 6.66%, resulting in a mild flattening of the 5Y–10Y curve by 1.0bps, while the INDOBeX Composite rose 0.13%. Market sentiment improved slightly after reports emerged that the US and Iran had agreed on a proposed 60-day extension of the ceasefire while continuing negotiations over Iran’s nuclear program, although final approval from President Trump remains pending. The draft framework includes reopening unrestricted shipping through the Strait of Hormuz and requiring Iran to remove naval mines within 30 days, easing some concerns over global energy supply disruptions. Domestically, Indonesia’s latest SBN auction recorded solid demand, with incoming bids reaching IDR57.3tn and awarded amounts totaling IDR36.9tn, translating to a bid-to-cover ratio of 1.56x. Demand remained resilient across benchmark tenors, particularly FR0109 and FR0108, while long-end yields stayed relatively stable around the 6.9%–7.0% range despite ongoing market volatility. In the US, M2 money supply climbed to a record USD22.8tn in April, signaling continued liquidity expansion, while initial jobless claims edged up modestly to 215k, suggesting the labor market remains relatively resilient despite gradual signs of softening. On the credit side, Fitch affirmed PT Pertamina Lubricants’ rating at ‘AA-(idn)’ with stable outlook, supported by its strong domestic market position and strategic linkage to Pertamina Group, while PT Hino Finance Indonesia’s rating was affirmed at ‘AA+(idn)’ with stable outlook following improvements in the parent company’s credit profile.