INDON Sov Curve Steepens, BI Gov Hint At No Further Hikes

The Indonesian sov curve has bear-steepened today, the local market is closed today and tomorrow for Ascension day. Wednesday afternoon saw Bank Indonesia Gov Warjiyo speak where he hinted at no more rate hikes, although would look to support the currency.

• The front-end INDON curve is little changed today, while the curve has steepened the 2Y yield unchanged at 5.24%, 5Y yield is 1bps higher at 5.20%, the 10Y yield is 2.5bps higher at 5.280%, while the 5-year CDS is unchanged at 72bps.
• The INDON to UST spread diff the 2Y is now 40.5bps (+0.5bp), 5yr is 68.5bps (-2.5bps), while the 10yr is 77.5bps (-0.5bp). Over the past month the belly of the INDON curve has underperformed, the 5yr was trading just 46bps wider early march.
• In cross-asset moves, local markets are closed, Palm Oil is 0.16% lower, while US tsys yield are 1-2bps higher.
• Bank Indonesia Governor Perry Warjiyo yesterday indicated that further interest rate hikes are not necessary, aiming to sustain efforts to strengthen the rupiah beyond the 16,000 level. Despite recent market surprises, including a rate hike, the rupiah has shown resilience, bolstered by improved global conditions and the central bank's commitment to currency support.
• Looking ahead; Trade Balance on Wednesday