Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian bonds strengthened across the belly of the curve, with the 5Y yield (FR104) falling -2.0 bps to 6.70% and the 10Y yield (FR0108) declining more sharply by -7.7 bps to 6.72%, resulting in a bull flattening of the 5Y–10Y curve by -5.7 bps, while INDOBeX slipped marginally by 0.03%. Market sentiment improved as the US and Iran moved closer toward a framework agreement to end the near 10-week conflict, with negotiations reportedly progressing toward a memorandum covering future nuclear talks. President Trump also temporarily suspended “Project Freedom,” the US escort initiative in the Strait of Hormuz, although the naval blockade on Iranian ports remains in place. Domestically, Bank Indonesia tightened FX regulations by lowering the threshold for cash US dollar purchases without supporting documents to USD25k from USD50k, as authorities sought to stabilize the rupiah after it briefly weakened toward record lows near IDR17,443/USD. The currency later recovered modestly, supported by easing oil prices and improving sentiment around the US–Iran talks. In the US, the Federal Reserve kept rates unchanged at 3.5%–3.75% for a third consecutive meeting, although the rare 8-4 split vote highlighted growing differences within the Fed regarding the policy outlook. On the credit side, MBMA plans to repay its maturing bonds and sukuk in Jul-2026 using a combination of internal and external funding, supported by solid liquidity, while JSTT received an idAAA (stable) rating, backed by strong government support and its strategic role in water management.