Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds showed mixed performance, with the 5Y yield (FR104) rising 1.5bps to 7.21% while the 10Y yield (FR0108) declined 4.6bps to 7.24%, resulting in a flattening of the 5Y–10Y curve by 6.0bps, while the INDOBeX Composite edged up 0.01% to 430.673. Global markets remained focused on developments surrounding the Strait of Hormuz as Iran signaled progress in negotiations with Oman over shipping arrangements following the suspension of planned US military strikes, easing concerns over immediate supply disruptions and contributing to a decline in oil prices. Domestically, Indonesia’s inflation moderated to 2.88% YoY in July from 3.34% in June, supported by slower food price increases and stable core inflation at 2.76%, while monthly consumer prices declined 0.14%, marking the first contraction since January. However, trade conditions remained challenging as Indonesia recorded a USD0.45 billion trade deficit in June, driven by a sharp rise in imports that outpaced export growth, although the country maintained a USD3.57 billion surplus during the first half of 2026. Meanwhile, Indonesia’s manufacturing sector returned to expansion, with the S&P Global Manufacturing PMI rising to 50.2 in July from 46.9 in June, supported by improving domestic demand, higher output, renewed hiring, and stronger business confidence despite continued weakness in export orders. Looking ahead, the government will conduct an SBN auction on August 4, 2026, with an indicative target of IDR32.0 trillion and a maximum award size of 150% of the target, offering three SPN series and six fixed-rate bonds, including the new FR0110 benchmark and reopening of several existing benchmark series.