Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds came under pressure, with a bear flattening in the 5Y–10Y segment as the 5Y yield (FR104) rose sharply by +10.2 bps to 6.72% and the 10Y yield (FR0108) increased +4.2 bps to 6.80%, narrowing the spread by -6.0 bps, while INDOBeX declined 0.19%. The move reflected a more cautious macro backdrop, as a fragile US–Iran ceasefire held despite renewed clashes in the Strait of Hormuz following the launch of “Project Freedom,” keeping geopolitical risks elevated and energy markets volatile. Domestically, economic data was mixed, with 1Q26 GDP growth accelerating to 5.61% YoY, supported by stronger consumption and government spending, although external pressures persisted as exports slowed and imports picked up, while quarterly growth turned negative. Fiscal dynamics also came into focus, with the budget deficit widening to IDR240.1tn (0.93% of GDP) amid faster spending growth, pushing the primary balance into deficit earlier in the year. Liquidity conditions remained active, with strong demand in the SVBI auction and Bank Indonesia allotting USD10.04bn in overnight FX term deposits, reflecting continued demand for short-term dollar placements.