One Pager Series — SIMINVEST Bond Pharos
Indonesian government bonds weakened sharply, with the 5Y yield (FR104) rising 10.8bps to 7.04% and the 10Y yield (FR0108) increasing 5.9bps to 7.18%, flattening the 5Y–10Y curve by 4.9bps, while the INDOBeX Composite fell 0.26% to 438.554. Global bond markets remained under pressure as prospects for a US-Iran agreement on reopening the Strait of Hormuz remained limited, while elevated oil prices, persistent inflation concerns, Fed tightening, and heavy Treasury issuance continued to weigh on US bonds. Domestically, Indonesia’s parliament approved the 2027 state budget targeting 6% economic growth and a 2.4% of GDP fiscal deficit, while the rupiah weakened toward IDR18,000/USD amid higher oil prices and strong domestic dollar demand, prompting Bank Indonesia to calibrate its FX interventions. Meanwhile, the government’s SBN auction attracted IDR42.9tn of bids and awarded IDR28.8tn, with a 1.49x bid-to-cover ratio, while demand was strongest for FR0112, FR0107, and FR0105.