Firmer US Yields Drive USD/IDR Back To 15500, Watching Debt Inflows

USD/IDR sits back near 15500 in latest dealings. This is off session highs (15517) but is still nearly 0.30% weaker in IDR terms versus Monday closing levels. After the THB and KRW, IDR is the weakest performer in spot terms within the Asia Pac region.

• We remain within recent ranges for the pair, with recent dips sub 15400 not sustained. On the topside the 20 and 50-day EMAs are in the 15540-60 range. Note the 100-day EMA is back at 15463.
• A weaker IDR is in line with a firmer US yield backdrop. The US real 10yr yield climbing back to 2.07% on Monday against recent lows of 2.0% from the end of last week.
• We have seen better inflows into local bonds from offshore investors, +$668.3mn last week. In percentage terms, foreign ownership levels are nearly 4% above late Oct lows.
• These trends will be watched closely, but it will likely need a concerted back up in US real yields to drive outflow pressures back past Oct lows.
• The data calendar has FX reserves on Thursday and then consumer confidence on Friday.