Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds traded mixed, with the 5Y yield (FR104) rising 5.4bps to 7.22% while the 10Y yield (FR0108) declined 1.7bps to 7.27%, resulting in a flattening of the 5Y–10Y curve by 7.1bps. The INDOBeX Composite slipped 0.02% to 430.140. Global risk sentiment remained fragile as the US expanded its military campaign against Iran for an 11th consecutive day, widening strikes to targets near Tabriz, while Iran continued retaliatory attacks on US bases across the Gulf. Prospects for renewed diplomacy faded after Tehran stated that no negotiations were underway unless the US first honored the terms of the collapsed June ceasefire agreement. Domestically, Bank Indonesia unexpectedly kept the BI Rate unchanged at 5.75%, despite market expectations for a 25bps hike, signaling a preference to support rupiah stability through targeted liquidity and foreign exchange measures rather than additional policy tightening. The central bank simultaneously expanded incentives for hedging swaps, refined its macroprudential liquidity incentive (KLM) framework, and broadened its foreign exchange operations to include offshore renminbi spot and swap instruments, while maintaining that higher SRBI yields continue to support foreign portfolio inflows. On the credit front, PEFINDO assigned an idA rating with a Stable Outlook to PT Bank Pembangunan Daerah Daerah Istimewa Yogyakarta (BPD DIY), while PT Chandra Asri Pacific Tbk confirmed it will repay its IDR266.95 billion bond maturing in October 2026 using internal funds, supported by a strong cash position.