INDON Sovs Curve Steepens, BI Intervenes in FX Market

The Indonesian sov curve has slightly steepened today. Earlier comments from BI officials stated they had intervened in the IDR to keep it below 16,300, and that they will continue to intervene in the FX spot, Domestic NDF and bond markets.

• The INDON curve is slightly steeper, with the 7yr seeing the most selling pressure. Yields are are 1-4bps higher, with the 2Y yield is +1bp at 5.320%, 5Y yield is +2bps at 5.11%, the 10Y yield is 2bp at 5.18%, while the 5-year CDS is 0.5bp lower at 71.5bps.
• The INDON to UST spread diff the 2Y is now 45bps (-0.5bps), 5yr is 65bps (+5bps), while the 10yr is 73.5bps (3.5bps).
• In cross-asset moves, USD/IDR is little changed today trading at 16,290. The JCI is 0.20% lower. While US tsys futures have edged higher throughout the day and trade near session best levels, yields are 1-3bps lower
• According to a survey by Bank Indonesia, retail sales in Indonesia are projected to increase in May. The real sales index rose by 4.7% year-on-year, driven by higher sales in the clothing, food, beverage, and tobacco sectors, as well as parts and accessories. However, on a month-on-month basis, the real sales index is anticipated to decrease by 1% due to normalized community activities following the Eid al-Fitr holiday.
• Looking ahead, there is little on the data calendar, with a bond auction on Tuesday the major focus.