Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds extended their recovery, with the 5Y yield (FR104) declining 2.9bps to 7.17% and the 10Y yield (FR0108) falling 3.6bps to 7.21%, resulting in a slight flattening of the 5Y–10Y curve by 0.7bps, while the INDOBeX Composite rose 0.19%. Market sentiment improved after US producer inflation came in softer than expected, with headline PPI easing to 5.5% YoY in June from 6.0% in May, while prices fell 0.3% MoM for the first time since August 2025, largely driven by lower energy costs. Core PPI also undershot expectations, reinforcing expectations that underlying inflationary pressures continue to moderate. The softer US inflation data weighed on the US dollar, lifting most Asian currencies, with the Indonesian rupiah and Malaysian ringgit leading regional gains, although elevated oil prices remain a key risk to the outlook. Meanwhile, Bank Indonesia awarded IDR15.0 trillion in its latest SRBI auction from total bids of IDR30.7 trillion, with demand concentrated in the 12-month tenor, where IDR13.3 trillion was allotted at a weighted average yield of 7.663%. On the credit front, PT Merdeka Battery Materials Tbk (MBMA) fully repaid its IDR1.16 trillion Bond I Phase I Year 2025 Series A and IDR213.3 billion Sukuk Mudharabah I Phase I Year 2025 Series A at maturity, leading to the withdrawal of the respective ratings.