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Indon Sov Curve Flatter, Spread Diff Tightens

INDONESIA

Indonesian USD sovereign debt curve is slightly flatter today, yields are 2-8bps higher, following US yields higher post stronger-than-expected ISM data. Indonesian CPI rose on higher food prices

  • The INDON sov curve has bear-steepened on Tuesday with the 2Y yield 3bp higher at 4.95%, 5Y yield is 5.5bps higher at 4.925%, the 10Y yield is 6.5bps lower at 5.06%, while the 5-year CDS is 2bps higher at 74.5bps
  • The INDON to UST spread has tightened over the past day with the INDON curve out-performing the move higher in yields the 2yr is 26bps (-5bps), 5yr is 61bps (-3bp), while the 10yr is 75bps (-3bps).
  • In cross-asset moves, the USD/IDR is 0.26% higher, the JCI is 0.45% lower, Palm Oil is 0.16 lower, while US Tsys yields have steepened with yields 0.5bp higher to 1.5bps lower.
  • Indonesia's inflation rose past 3% in March, nearing the upper limit of the central bank's target range, driven by increased demand for food during Ramadan. The rise, reaching 3.05%, exceeded expectations and was led by higher prices for food items like eggs, poultry, and rice. This acceleration may constrain Bank Indonesia's ability to ease policy, particularly as the rupiah weakened to its lowest level since November. However, officials anticipate temporary food price spikes and expect some relief with the onset of the harvest season for rice and corn, alongside moderating transport costs.
  • Looking ahead: Light calendar ahead with just Foreign Reserves ahead for the week.
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Indonesian USD sovereign debt curve is slightly flatter today, yields are 2-8bps higher, following US yields higher post stronger-than-expected ISM data. Indonesian CPI rose on higher food prices

  • The INDON sov curve has bear-steepened on Tuesday with the 2Y yield 3bp higher at 4.95%, 5Y yield is 5.5bps higher at 4.925%, the 10Y yield is 6.5bps lower at 5.06%, while the 5-year CDS is 2bps higher at 74.5bps
  • The INDON to UST spread has tightened over the past day with the INDON curve out-performing the move higher in yields the 2yr is 26bps (-5bps), 5yr is 61bps (-3bp), while the 10yr is 75bps (-3bps).
  • In cross-asset moves, the USD/IDR is 0.26% higher, the JCI is 0.45% lower, Palm Oil is 0.16 lower, while US Tsys yields have steepened with yields 0.5bp higher to 1.5bps lower.
  • Indonesia's inflation rose past 3% in March, nearing the upper limit of the central bank's target range, driven by increased demand for food during Ramadan. The rise, reaching 3.05%, exceeded expectations and was led by higher prices for food items like eggs, poultry, and rice. This acceleration may constrain Bank Indonesia's ability to ease policy, particularly as the rupiah weakened to its lowest level since November. However, officials anticipate temporary food price spikes and expect some relief with the onset of the harvest season for rice and corn, alongside moderating transport costs.
  • Looking ahead: Light calendar ahead with just Foreign Reserves ahead for the week.