Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds came under pressure, with the 5Y yield (FR104) rising 11.6bps to 6.83% and the 10Y yield (FR0108) climbing 8.7bps to 6.74%, resulting in a flattening of the 5Y–10Y curve by 2.9bps, while the INDOBeX Composite declined 0.26%. Market sentiment remained cautious as US-Iran negotiations showed little progress, with Tehran indicating that no meaningful breakthrough had been achieved regarding a proposed truce extension and the reopening of the Strait of Hormuz. Regional tensions also remained elevated following recent military exchanges involving Iran and US allies in the Gulf, while clashes continued in southern Lebanon despite ongoing ceasefire efforts. Domestically, investor attention shifted to Indonesia’s parliament after lawmakers approved revisions to the financial-sector law that broaden Bank Indonesia’s mandate to support real-sector growth and introduce greater parliamentary oversight of the central bank. The move comes at a sensitive time, with the rupiah weakening beyond IDR18,000/USD and markets closely monitoring potential implications for policy credibility and central bank independence. In the US, initial jobless claims rose by 13,000 to 225,000 in the final week of May, the highest level since February, although continuing claims eased slightly, suggesting labor market conditions remain relatively resilient. On the credit front, PEFINDO reaffirmed PLN’s idAAA rating with a Stable Outlook, reflecting its strategic role and strong government support, while Bank Sulselbar’s idA+ rating was also affirmed, supported by its strong regional franchise, capitalization, and liquidity profile.