Indon Sov Curve Steeper,IDR Hits 4 Year Highs Amid Heavy Bond Selling

Indonesian USD sovereign debt curve is slightly steeper today, with yields flat to 2bps higher, yields pushed higher throughout the Tuesday session finishing the day 5-8bps higher, tracking moves made by US Treasuries. There has been little in the way of local market headlines, with the weakening IDR the major focus as the IDR slides to a four-year low amid USD strength and heavy bond outflows.

• The INDON sov curve is slightly steeper on Wednesday, the 2Y yield is unchanged at 4.97%, 5Y yield is 0.5bp higher at 4.945%, the 10Y yield is 1.5bps higher at 5.095%, while the 5-year CDS is 1bps higher at 75.5bps
• The INDON to UST spread widen in the front-end on Tuesday ad Fed speakers support front-end US yields, while the long-end INDON yields out-performed the moves by US treasuries, the 2yr is 28bps (+2bps), 5yr is 60bps (-1bp), while the 10yr is 74.5bps (-0.5bps).
• In cross-asset moves, the USD/IDR is 0.14% higher, the JCI is 0.65% lower, Palm Oil is 2.00% higher, while US Tsys curves are largely unchanged for the day with yields flat to 0.5bp higher.
• Bank Indonesia intervened in the currency market to stabilize the rupiah after it reached a four-year low due to a global dollar rebound and significant bond outflows. Heavy bond outflows, amounting to around $1.7 billion in the first quarter, contributed to the rupiah's decline. Additionally, concerns about above-expected March inflation and President-elect Prabowo Subianto's expansive spending plans, particularly a $29-billion school meal program, have raised worries about Indonesia's budget deficit and credit ratings
• (Bloomberg) -- BI May Surprise With Rate Hike After Rupiah Selloff: Barclays (Sell link)
• Looking ahead: Light calendar ahead with just Foreign Reserves ahead for the week.