Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds extended their recovery, with the 5Y yield (FR104) declining 4.1bps to 7.09% and the 10Y yield (FR0108) easing 2.0bps to 7.10%, resulting in a modest steepening of the 5Y–10Y curve by 2.2bps, while the INDOBeX Composite rose 0.12%. Market sentiment was supported by improving foreign participation, as Indonesian government bonds attracted net foreign inflows of USD1.82 billion in 2Q26, including USD1.26 billion in June, reversing the heavy outflows seen in the previous quarter. The recovery has been driven by Bank Indonesia’s cumulative 100bps policy rate hikes, attractive bond valuations, and strong demand for SRBI, with relatively low foreign ownership of government bonds leaving room for further inflows and providing additional support for the rupiah. Meanwhile, Danantara reshuffled its senior management team as the sovereign wealth fund continues to expand its role in advancing the government’s strategic investment agenda. In the US, the Federal Reserve’s balance sheet continued its gradual decline under quantitative tightening, signaling ongoing liquidity normalization. On the credit front, PEFINDO assigned an idAA rating to PT Adaro Indonesia’s proposed IDR2 trillion bond while affirming its Stable Outlook, and assigned idA- ratings to PT Eagle High Plantations Tbk’s proposed bond and sukuk programmes, also with a Stable Outlook.