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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
IDR
USD/IDR sits back under 16200 in latest dealings, around 0.4% stronger in IDR terms for the session. This leaves us within recent ranges, but a fresh high above 16300 (Apr highs of 16288) may have been avoided at least in the near term. Still, the 20-day EMA is back at 16086.3, so a further rally is still needed to turn the technical tide.
- The less hawkish than feared US FOMC outcome, particularly in terms of Powell comments has helped pull US yields away from recent highs. ID-US 10yr differentials sit close to multi month highs, last near +260bps.
- The chart below plots this differential against US/IDR which is inverted on the chart. Such a backdrop and IDR at cheapish levels from an historical standpoint, may help encourage less bond outflows or some inflows from offshore investors. April saw around $1bn in net outflows (to Apr 29).
- Still, it may be too early to signal the all clear, with uncertainties surrounding the new govt's fiscal outlook and timing around the Fed shift still unclear. The economic affairs minister also noted last yesterday that capital flight concerns remain.
- Coming up soon we have Apr CPI. Little change is expected in terms of y/y momentum. The headline is projected at 1.78% (1.77% prior), core at 3.10% (prior 3.05%).
Fig 1: USD/IDR (Inverted) & ID-US 10yr Nominal Govt Bond Yield Differential
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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