Bond Market Review (Wednesday,04/30)
The strengthening trend in Government Securities (SUN) prices continued during Wednesday’s trading session. According to data from PHEI, the yield on the 5-year SUN benchmark (FR0104) remained unchanged at 6.58%, while the yield on the 10-year SUN benchmark (FR0103) fell by 2 basis points (bp) to 6.85%. Bloomberg data showed that the 10-year SUN yield curve (GIDN10YR) also declined by 2bp to 6.87%. The current level of the 10-year yield curve is approaching the lower bound of our estimated weekly range of 6.86–7.07%.
The outright traded transaction volume of Government Securities (SBN) reached Rp31.9 trillion on Wednesday, higher than the previous day’s volume of Rp25.4 trillion. FR0103 and FR0104 were the two most actively traded series in the secondary market, with transaction volumes of Rp6.3 trillion and Rp5.2 trillion, respectively. Meanwhile, corporate bond outright transactions totaled Rp4.2 trillion.
Bloomberg data showed that the Rupiah appreciated against the US Dollar, strengthening by 0.94% on Wednesday to Rp16,603/US$, followed by a further 0.16% gain to Rp16,577/US$ on Thursday.
Bond Market Preview (Friday,05/02)
According to the advance estimate released by the US Bureau of Economic Analysis (BEA) on 30 April 2025, US real GDP contracted by 0.3% on an annualized basis in Q1 2025. The decline was primarily driven by a surge in imports—which subtract from GDP calculations—as companies rushed to import goods ahead of new Trump administration tariffs. However, increases in investment, household consumption, and exports offset much of the decline.
In addition, the BEA also released the March 2025 Personal Consumption Expenditures (PCE) data. The PCE Price Index, which reflects consumer inflation, remained stable in March, with the annual inflation rate slowing to 2.3% from 2.7% in February. The Core PCE Price Index, which excludes food and energy prices, also showed a slowdown, with the annual rate declining to 2.6% from 3.0% in the previous month. These figures suggest that inflation is approaching the Federal Reserve’s 2% target.
Global indicators showed fluctuating sentiment over the past two days. The US Treasury (UST) 5-year yield curve fell by 5bp from Tuesday’s position to 3.72% but rebounded by 9bp to 3.81% on Thursday. Similarly, the UST 10-year yield curve dropped 2bp to 4.17% on Wednesday before rising 8bp to 4.25% on Thursday. Meanwhile, Indonesia’s 5-year Credit Default Swap (CDS) rose by 2bp to 98bp on Wednesday and remained at that level.
Considering the market conditions described above, we see the potential for increased volatility in the prices and yields of Rupiah-denominated Government Securities (SBN). Based on the yield curve valuation, the following bonds may be attractive to investors: FR0094, FR0099, FR0087, and FR0103.
