Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds saw a bull flattening in the 5Y–10Y segment, with the 5Y yield (FR104) declining -6.2 bps to 6.61% and the 10Y yield (FR0108) falling more sharply by -8.8 bps to 6.76%, narrowing the spread by -2.6 bps, while INDOBeX rose 0.16%. The macro backdrop remained cautious, as tensions around the Strait of Hormuz persisted, with oil prices rising and Iran rejecting US proposals to guide ships through the strait, heightening concerns over prolonged supply disruptions and their impact on global inflation and growth. Domestically, inflation showed signs of easing, with headline CPI slowing to 2.42% YoY in April, its lowest level since August 2025 while core inflation also moderated, pointing to softer underlying price pressures. However, external dynamics were less supportive, as the trade surplus narrowed to USD3.32bn amid declining exports and a pickup in imports, particularly in energy. On the credit side, ISSP and MORA have both fully repaid their respective bonds and sukuk, leading to rating withdrawals.