One Pager Series — SIMINVEST Bond Pharos
Indonesian government bonds weakened, with the 5Y yield (FR104) rising 6.1bps to 7.26% and the 10Y yield (FR0108) increasing 2.1bps to 7.46%, flattening the 5Y–10Y curve by 4.0bps, while the INDOBeX Composite fell 0.25% to 434.307. Global sentiment remained cautious ahead of the Federal Reserve’s policy decision, as rising oil prices and Middle East tensions reinforced inflation concerns, with Brent crude reaching USD116.58/bbl and the US 10Y Treasury yield near 4.98%. Domestically, the 10Y government bond yield remained under pressure amid rupiah weakness and concerns over a potential MSCI reclassification, although foreign holdings of Indonesian government bonds increased by USD509mn this month. The government awarded IDR20.65tn in its SUN auction from IDR31.09tn in bids, with FR0110 attracting the strongest demand and receiving IDR6.75tn in awards at a 7.380% weighted-average yield.