USD/IDR Ticks Up From Recent Lows, Higher Onshore Equities May Help Cap Gains

USD/IDR sits a little higher in the first part of Wednesday dealings. We last tracked just near 15875, around 0.15% weaker in IDR terms. This came after closing yesterday at 15850, which also marked lows for the session. The 1 month USD/IDR NDF has followed a similar trajectory, with the pair unable to sustain breaches sub 15850.

• Highs in spot USD/IDR yesterday came in close to 15890, while on Monday we got above 15960 before intervention headlines crossed.
• Finance Minister Sri Mulyani reportedly stated that the government will release a policy package to respond to the current economic situation, including the weakening currency (see this link for more details).
• In the cross asset space, IDR trends still look to be fairly closely aligned with US real yields. The slight downtick in Tuesday US trade provides only modest relief at this stage (with yields only modestly down from cycle highs). The start of the week saw a chunky -$234mn in outflow from local bonds.
• 5yr CDS has moved off recent highs though, back sub 97bps. Global equity market sentiment has stabilized, with risk aversion around the Israel/Hamas conflict lowered somewhat. Onshore equities have recovered further ground, the JCI last near 6870 (+1.0%).