Front-End INDON Sov Curve Underperforms UST Move, BI Rate Call Later

Indonesian USD sovereign debt curve has followed UST yields lower, although the front-end has really lag the move lower, INDON yields are 1-3bps lower. The Bank Indonesia will hold their rate decision meeting later where they are expected to leave rates on hold at 6.00%, while the Indonesian President is expected to be announced at some point today.

• The INDON sov curve has bull flattened over the day with front-end yields 1-2bps lower while the mid to longer end is 2-4bps lower, the 2Y yield is 1bp lower at 4.975%, 5Y yield is 2bps lower at 4.98%, the 10Y yield is 3bps lower at 5.06%, while the 5-year CDS is down 0.5bp to 67.5bps.
• The INDON to UST spread difference drifted wider on Tuesday as the front-end underperform moves tighter by UST, while the longer end tightened. The 2yr is 29bps (+3bp), 5yr is 68.5bps (+2bps), while the 10yr is 77bps (-0.5bps).
• In cross-asset moves, the USD/IDR is 0.11% higher, the JCI is 0.18% lower, Palm Oil is pushing higher, up 1.36%%, while US Tsys yields are unchanged due to Japan Holiday.
• Foreign Investors broke their 7-day streak of selling Indonesian Bonds, with a $190m inflow. The 5-day average is now -$66m, the 20-day average is -$56m while the longer term 200-day average is now just $0.12m
• Indonesia Says BYD EV Factory to Start Production Early 2026, after announcing they would invest 1.3B into Indonesia by budling a production facility and as many as 50 sales locations across the country.
• Looking ahead: Wednesday BI Rate decision, expected to hold steady at 6.00%.