INDON Sov Curve Flattens, CPI Comes In Below Consensus

The INDON sov curve has twist-flatten today pivoting at the 7yr. S&P PMI declined from the month prior, while CPI missed consensus.

• The INDON curve has twist-flattened today, yields are 1-8bps lower, the 2Y yield is -1bps at 5.290%, 5Y yield is -4.5bps at 5.130%, the 10Y yield is -5bps at 5.220%, while the 5-year CDS is 1bp at 71.5bps.
• The INDON to UST spread diff the 2Y is now 40bps (+2bp), 5yr is 63bps (+2bps), while the 10yr is 74bps (+1.5bps).
• In cross-asset moves, USD/IDR is 0.17% lower at 16,222, the JCI is up 1.55%, while US tsys curve has flattened today, with yields flat to 2bps lower.
• Earlier, S&P Global Indonesia PMI Mfg for May came in at 52.1 vs 52.9 in April, while CPI rose 2.84% y/y less than the 3.00% increase in April, this was below the consensus forecast of 2.97%.
• Indonesia aims to finalize three key trade agreements by year-end to address potential balance of payments and fiscal deficits, expanding trade partnerships with 43 countries. These agreements, including the IEU-CEPA, the Indonesia-Eurasian Economic Union FTA, and the CPTPP, are expected to boost economic growth, increase state revenue, and enhance exports, particularly to the European Union and Latin America.
• Looking ahead, it is a quiet week with just Foreign Reserves for May on Friday.