Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds were broadly stable, with the 5Y yield (FR104) edging up 1.1bps to 6.72% and the 10Y yield (FR0108) rising just 0.1bps to 6.66%, resulting in a slight flattening of the 5Y–10Y curve by 1.0bp, while the INDOBeX Composite gained 0.03%. Market attention remained firmly on geopolitical developments as fresh military clashes between the US and Iran heightened uncertainty surrounding ongoing ceasefire negotiations, with both sides still divided over key issues including freedom of navigation through the Strait of Hormuz, sanctions relief, and Iran’s nuclear program. Domestically, focus turned to Danantara’s plans for a potential USD bond issuance through its investment arm, alongside Bank Indonesia’s continued efforts to defend the rupiah through market intervention, tighter FX regulations, and expanded local currency settlement initiatives amid renewed pressure on the currency. In the US, labor market conditions remained resilient as ADP reported private payroll growth of 122,000 jobs in May, exceeding expectations and marking the strongest increase since January 2025, led by gains in education, healthcare, and transportation-related sectors. On the credit front, Fitch assigned a BBB rating to Danantara Investment Management’s proposed Global MTN programme, reflecting strong expected government support, while BAFI is expected to repay its IDR458bn bond maturing in September 2026 using available external funding facilities supported by substantial undisbursed bank lines.