Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds saw a broad-based selloff, with yields rising across the curve as tightening expectations and global risk aversion intensified. The 1Y yield (FR0059) increased by 6.4bps to 7.17%, the 5Y (FR104) climbed 13.5bps to 7.41%, the 10Y (FR0108) surged 22.9bps to 7.42%, the 15Y (FR0106) rose 16.1bps to 7.48%, and the 20Y (FR0107) advanced 20.9bps to 7.51%, resulting in a bear-steepening move as the 5Y–10Y curve widened by 9.4bps. The INDOBeX Composite fell 0.83% to 422.853, reflecting weaker demand for duration amid renewed macro and geopolitical uncertainty. Global sentiment remained risk-off as geopolitical tensions escalated after US President Donald Trump threatened additional strikes on Iran if an interim peace deal is not reached, while Iran responded with attacks on US military positions and renewed warnings over potential restrictions in the Strait of Hormuz, keeping energy and shipping risks elevated. At the same time, US inflation remained sticky, with producer prices rising 1.1% MoM in May and headline PPI accelerating to 6.5% YoY, reinforcing concerns that inflation pressures remain entrenched despite signs of softer labor market conditions, including rising jobless claims and higher continuing claims. Domestically, pressure also built as expectations of further Bank Indonesia tightening persisted alongside a 3.7% YoY contraction in retail sales, signaling early consumption weakness despite recent policy actions. On the credit side, PEFINDO affirmed WIFI at idA with Stable Outlook and assigned ratings to its proposed bond and sukuk programs on strong infrastructure-led growth visibility, while BMTR outlined refinancing plans for its IDR10.7bn maturing obligations using proceeds from recent issuances, supporting orderly liability management.