Fixed Income Daily One Pager Series — Daily Bond Lantern
Indonesian government bonds rallied sharply, with the 5Y yield (FR104) falling 6.3bps to 6.79% and the 10Y yield (FR0108) declining 6.9bps to 6.95%, resulting in a flattening of the 5Y–10Y curve by 0.5bps, while the INDOBeX Composite gained 0.15% to 439.795. Market sentiment was supported by a downward revision to US employment, with the BLS preliminary benchmark revision reducing estimated payrolls by 79,000 in the 12 months through March 2026, highlighting a softer underlying labor market. Domestically, Destry Damayanti was formally approved as Bank Indonesia Governor for 2026–2031, with her tenure set to focus on rupiah stability, inflation management, liquidity transmission, payment-system digitalization, and maintaining fiscal coordination while preserving BI’s independence. Meanwhile, the Federal Reserve’s balance sheet declined by USD14.3 billion WoW to USD6.75 trillion as of August 20, continuing its gradual normalization. In the latest SRBI auction, Bank Indonesia awarded IDR24.0 trillion from IDR43.54 trillion in total bids, with demand concentrated in the 12-month tenor, which attracted IDR39.85 trillion in bids and was awarded at a 7.00% weighted-average winning rate. In the corporate bond market, PEFINDO downgraded PT Industri Kereta Api (Persero) (INKA) to idBB from idA- while maintaining a Negative Outlook, reflecting prolonged delivery delays on the KCI project, which have pressured cash flow and resulted in payment delays to suppliers.