Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds traded weaker, with the 5Y yield (FR104) rising 6.1bps to 6.74% and the 10Y yield (FR0108) increasing 3.4bps to 6.69%, resulting in a flattening of the 5Y–10Y curve by 2.7bps, while the INDOBeX Composite declined 0.13%. Market sentiment was supported by improving global manufacturing data, as the US ISM Manufacturing PMI rose to 54.0 in May, its highest level since May 2022 and above expectations, driven by stronger new orders, production, and order backlogs, although employment remained in contraction territory. Domestically, attention turned to the upcoming SBSN auction on June 2, where the government targets IDR12tn across three SPNS and five PBS series, while retaining flexibility to award up to 200% of the indicative target. Meanwhile, the Federal Reserve’s balance sheet declined by USD9.3bn w/w to USD6.70tn, reflecting the continued normalization of liquidity conditions despite remaining well above pre-pandemic levels. On the credit side, SMGR fully repaid its IDR714bn bond maturing on May 29, while BCA Insurance received an AA+ financial strength rating from PEFINDO, supported by strong backing from BCA alongside solid capitalization and liquidity.