INDONESIA: USD/IDR Modestly Higher Amid Broader USD Gains

• USD/IDR is up at 15,417 in Jakarta morning; versus Wednesday's close of 15,400.
• Bloomberg Asia dollar spot index is flat at the open and the Bloomberg Dollar spot index is 0.08% higher.
• The US core CPI beat is aiding broader USD sentiment, with front end yields higher over the past 24 hours.
• USD/IDR one-month implied volatility is down this morning to 7.33%, versus 7.455% close on Tuesday.
• Indonesia's 10-year bond yield is 1bp unchanged at 6.58%
• Indonesia 5 yr USD CDS at 71bps (yesterday close 71bp, 5-year low 58bp in 2020).

Headlines

• Core US Inflation unexpectedly picked up in August reducing the chances of a large Federal Reserve interest-rate cut next week and providing downward pressure on the USD (source:  Bloomberg).
• Brown Brothers Harriman noted that the market’s reaction after the debate — a softer dollar, falling Treasury yields and a drop in US stock futures — could indicate an unwinding of “Trump trades”.  This all poses upside options for Asian currencies.
• Strong loan growth at Bank Mandiri, Bank Central Asia, Bank Rakyat, Bank Negara Indonesia and peers could continue through year-end after system-wide loans climbed by 11.7% in July vs. a year earlier, according to Bank Indonesia (source: Bloomberg).
• Income President Prabowo to form Bigger, Investor-Friendly Cabinet: Source: BofA and Bloomberg)