Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds extended their gains, with the 5Y yield (FR104) falling 2.8bps to 7.16% and the 10Y yield (FR0108) declining 1.6bps to 7.24%, resulting in a steepening of the 5Y–10Y curve by 1.2bps, while the INDOBeX Composite advanced 0.12%. Market sentiment improved after Iran announced it had reached an agreement in principle with Oman on proposed shipping routes through the Strait of Hormuz, marking progress toward partially restoring maritime traffic, although the arrangement still requires approval from Iran’s leadership before a full reopening can take place. Meanwhile, the US labor market remained resilient, with initial jobless claims edging up slightly to 199,000 in the final week of July, below market expectations. Domestically, attention remained on Bank Indonesia’s leadership transition, with President Prabowo Subianto expected to submit candidates for the next BI governor to parliament this week. The rupiah strengthened to a two-week high, supported by lower oil prices amid easing geopolitical tensions, stronger-than-expected Q2 2026 GDP growth of 5.29% YoY, and July inflation of 2.88%, which remained within Bank Indonesia’s target range. In Bank Indonesia’s latest SVBI auction, the central bank awarded USD402 million out of USD412 million in bids, with demand concentrated entirely in the one-month tenor at a weighted average yield of 3.5988%.