Indonesian Sovs Bull Flatten, CPI Beats On Higher Food Prices

Indonesian USD Sovereign Debt yields were 1-2bps lower on Thursday, again under-performing the move in US Treasuries, however as we head into the Asia break INDON yields are bull flattening with curves 1-4bps tighter. S&P Global Indonesia PMI Mfg data was released earlier with the index falling to 52.7 vs 52.9, while CPI beat estimates at 2.75% vs 2.60% after prices of rice, chili and eggs rose more than expected.

• The 2Y is 1.2bp lower at 4.765%, 10Y is -3.6bps lower at 4.989%, while 5yr CDS are down 1bp to 69.5bps
• The spread difference between USD Indon & US Treasury yields continues to close with the 2Y now 25bps off l from Jan of 73bps, while the 10Y is now 75bps vs yearly lows of 112bps, the 10Y is roughly 20bps off the all time tight levels made back in march 2021 of 57bps.
• Cross market moves, the USD/IDR is 0.20% lower, the JCI is 0.60% lower while US Tsys yields are 0.5-1.5bps lower across the curve.
• BI Deputy Governor Juda Egung spoke at a forum on Thursday where he mentioned that the BI wont be cutting policy rates yet due to higher global uncertainty and volatility in the rupiah.
• Foreign Investors have largely been better sellers of Indonesian bonds over the past 20-days as the average daily flow currently sit at -$43m, while the longer term 200-day average sits at $3.94m
• Looking Ahead: It's a quiet Calendar for the next week other than on Tuesday when 108D bills to 25Y Sukuk Bonds are sold, while Foreign Reserves are due on Friday.