In August 2026, the 10-year U.S. Treasury yield climbed to around 4.78%, its highest level since January 2025, as renewed hawkish signals from the Federal Reserve and higher oil prices strengthened expectations for a September rate hike. U.S. headline CPI eased to 3.4% YoY in July (vs. 3.5% prior), while core CPI moderated to 2.5% from 2.6%. In Indonesia, inflation accelerated to 3.19% YoY in August from 2.88%, while Bank Indonesia maintained the BI-Rate at 5.75% for a second consecutive meeting as it assessed the impact of earlier tightening and continued to support rupiah stability. The rupiah strengthened from around IDR 18,000 per US dollar at the beginning of the month to approximately IDR 17,718 by month-end. Against this backdrop, Indonesia’s 10-year government bond yield declined to around 6.99% by month-end, down approximately 39 bps MoM, supported by improving market sentiment and greater currency stability. Activity in the domestic debt capital market however moderated, with sukuk issuance declining to IDR 0.3 trillion (vs. IDR 5.5 trillion in July), bringing cumulative issuance to IDR 25.1 trillion in 8M26. Meanwhile, corporate bond issuance eased to IDR 7.2 trillion (vs. IDR 19.2 trillion in July), although cumulative issuance continued to increase to IDR 86.0 trillion.