Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds came under renewed selling pressure, with the 5Y yield (FR104) rising 6.3bps to 7.22% and the 10Y yield (FR0108) increasing 6.0bps to 7.26%, resulting in a slight flattening of the 5Y–10Y curve by 0.2bps, while the INDOBeX Composite declined 0.15%. Market sentiment remained cautious as the US and Iran exchanged another round of military strikes, heightening concerns over the security of the Strait of Hormuz. US forces targeted Iranian air-defense systems, radar installations, and missile capabilities, while Iran retaliated with attacks on US military facilities in Kuwait, Bahrain, and Jordan. Conflicting statements from both sides over whether the Strait of Hormuz remains open to commercial shipping continued to fuel uncertainty over global energy supplies and inflation risks. On the domestic front, investor sentiment received some support after S&P Global Ratings affirmed Indonesia’s BBB sovereign credit rating with a Stable Outlook, citing the country’s prudent fiscal management and expectation that the budget deficit will remain below the statutory 3% of GDP ceiling. Meanwhile, the government will auction IDR10.0 trillion of SBSN on 14 July 2026, offering three SPN-S series and five PBS series, including the reopening of the PBSG002 Green Sukuk, to support 2026 budget financing. On the credit front, PT Indah Kiat Pulp & Paper Tbk fully repaid its IDR1.75 trillion bond and IDR612.6 billion sukuk at maturity, while PEFINDO assigned PT Kereta Commuter Indonesia (KCI) an idAAA rating with a Stable Outlook, reflecting strong parental support from PT Kereta Api Indonesia and KCI’s dominant position in the Greater Jakarta commuter rail market.