Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds remained under pressure, with the 5Y yield (FR104) rising 3.7bps to 7.18% and the 10Y yield (FR0108) increasing 3.3bps to 7.25%, resulting in a slight flattening of the 5Y–10Y curve by 0.4bps, while the INDOBeX Composite declined 0.13%. Market sentiment was weighed down by renewed geopolitical tensions after the US and Iran exchanged fresh military strikes, raising concerns that the fragile ceasefire and ongoing peace negotiations could collapse. The US reportedly struck around 90 targets across Iran aimed at limiting Tehran’s ability to disrupt shipping through the Strait of Hormuz, while Iran retaliated by targeting US-linked military facilities in Bahrain, Kuwait, and Qatar. The US also revoked a waiver allowing new Iranian oil sales, further heightening concerns over global energy supplies. Domestically, Indonesia’s retail sales contracted 3.9% YoY in May, marking the sharpest decline since May 2023 as elevated inflation and higher living costs continued to weigh on household spending, although motorcycle sales rebounded 1.1% YoY in June. Meanwhile, the US labor market remained resilient, with initial jobless claims falling to a six-week low of 215,000 despite a modest rise in continuing claims. On the primary market, Bank Indonesia will conduct an SVBI auction on 9 July with an indicative target of USD500 million across five tenors, while PT Bank Mandiri (Persero) Tbk plans to repay its IDR2.4 trillion bond at maturity using internal funds, supported by its strong liquidity position.