Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds traded mixed, with the 5Y yield (FR104) rising 1.8bps to 7.13% while the 10Y yield (FR0108) declined 2.6bps to 7.12%, resulting in a flattening of the 5Y–10Y curve by 4.4bps, as the INDOBeX Composite slipped 0.04%. Global sentiment remained supported by resilient US labor market data, with the unemployment rate easing to 4.2% in June and initial jobless claims falling to a five-week low of 219,000, although the improvement was accompanied by a decline in labor force participation, suggesting underlying labor market conditions have softened modestly. Domestically, Parliament approved the government’s 2027 budget framework, targeting GDP growth of 5.8%–6.5% and a fiscal deficit of 1.8%–2.4% of GDP, reinforcing the government’s commitment to fiscal discipline while maintaining inflation within Bank Indonesia’s target range. Meanwhile, Bank Indonesia awarded USD199 million in its latest SVBI auction from USD239 million in bids, with demand concentrated in the 1-month and 3-month tenors, highlighting continued appetite for short-term FX instruments. On the credit front, PEFINDO assigned an idAAA rating to PT Bussan Auto Finance’s proposed IDR4 trillion bond and IDR1 trillion sukuk programmes while affirming its Stable Outlook, and assigned an idAA rating with a Stable Outlook to PT Kliring Berjangka Indonesia (KBI).