Bond Market Review (Wednesday,05/07)
Government Debt Securities (SUN) prices appreciated in yesterday’s trading session. Based on data from PHEI, the yield on the 5-year SUN benchmark (FR0104) fell by 3 basis points (bps) to 6.55%, while the yield on the 10-year benchmark (FR0103) dropped by 2 bps to 6.85%. Bloomberg data indicated that the 10-year SUN yield curve (GIDN10YR) declined by 2 bps to 6.86%. The current 10-year SUN yield curve level remains in line with our estimated range for this week, which is between 6.82% and 7.02%.
The outright transaction volume of Government Securities (SBN) was recorded at Rp26.9 trillion yesterday, lower than the previous day’s volume of Rp43.7 trillion. FR0103 and FR0107 were the two most actively traded series in the secondary market, with transaction volumes of Rp7.9 trillion and Rp2.7 trillion, respectively. Meanwhile, the outright trading volume of corporate bonds stood at Rp4.1 trillion.
Bloomberg data also showed that the Rupiah weakened by 0.53% against the US Dollar, moving from Rp16,449/US$ on Tuesday to Rp16,536/US$ yesterday.
Bond Market Preview (Thursday,05/08)
The FOMC Meeting held on May 6–7, 2025, decided to keep the Federal Funds Rate (FFR) within the range of 4.25–4.50%. The decision reflects the Fed’s confidence in the current state of the US economy – characterized by solid economic growth and a low unemployment rate – while remaining cautious about rising uncertainties, especially those stemming from tariff policy tensions.
The Fed assessed that inflation has moderated but remains above its 2% target. It emphasized maintaining a data-dependent and balanced policy stance, signaling readiness to adjust policy based on future developments. Chairman Powell highlighted the growing risk of a scenario where both inflation and the unemployment rate could rise simultaneously, but reiterated the Fed’s commitment to keep long-term inflation expectations well anchored.
Global indicators reflected a constructive tone for the bond market, as evidenced by the decline in US Treasury (UST) yields and Indonesia’s Credit Default Swap (CDS) spread. The 5-year UST yield curve fell by 3 bps to 3.87%, and the 10-year UST yield curve declined by 4 bps to 4.26%. Meanwhile, the 5-year CDS dropped by 3 bps to 94 bps.
Considering the above market conditions, prices and yields of Rupiah-denominated Government Securities are likely to move sideways. Based on yield curve valuation, the following bonds might be attractive for investors: FR0094, FR0052, FR0073, FR0054, FR0103.
Kindly find the link to our Fixed Income Daily Market View for May 8, 2025 provided below this message. Thank you and best regards!
IND
https://research.bnisekuritas.co.id/doc-view?z=7d5102f0-fffc-4285-9c36-6effa9bb6b35
ENG
https://research.bnisekuritas.co.id/doc-view?z=5c48aa32-5f9c-4229-a19f-6b20096037b2
