Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds rallied, with the 5Y yield (FR104) falling 8.2bps to 7.19% and the 10Y yield (FR0108) declining 5.1bps to 7.26%, resulting in a steepening of the 5Y–10Y curve by 3.1bps, while the INDOBeX Composite gained 0.18%. Market sentiment improved as US President Donald Trump said an agreement to reopen the Strait of Hormuz could be reached within days, with Iran and Oman reportedly discussing a 60-day interim arrangement to restore commercial shipping through the strategic waterway, easing geopolitical and energy supply concerns. Meanwhile, US private payrolls increased by just 44,000 in July, the weakest gain in six months and below market expectations, pointing to a moderation in labor market momentum despite continued wage growth. Domestically, Indonesia’s economy expanded 5.29% YoY in Q2 2026, exceeding market expectations despite moderating from the previous quarter, supported by stronger investment, resilient domestic demand, and a rebound in exports. Following the stronger-than-expected GDP data, Finance Minister Purbaya Yudhi Sadewa signaled that the government is preparing additional stimulus measures, including support to mitigate the impact of El Niño, to sustain domestic demand and keep the economy on track toward its 6.0% growth target for 2026. In the corporate bond market, PEFINDO downgraded PT Wijaya Karya (Persero) Tbk (WIKA) to idSD from idB after the company deferred profit-sharing payments on its Shelf-Registered Sukuk Mudharabah III, following the failure to obtain sukuk holders’ approval for a payment extension, resulting in a missed payment due on August 3.