This week, markets are waiting for US Jun’25 NFP (cons: +116k m-m , prev: +139k m-m), while Indonesia would see the announcement of Jun’25 CPI (TRIM: +1.62% y-y, cons: +1.82% y-y, prev: +1.60% y-y). We are also nearing the deadline of US trade deals, where various countries were expected to see some delays in their deals, while Indonesia along with some other countries would likely meet the deadline. On spending front, US Real Consumer Spending dropped by -0.3% m-m (cons: +0.0% m-m, prev: +0.1% m-m). It signaled that some consumers tried to restraint their spending already. From domestic, BI surplus was recorded higher in 2024 (curr: +IDR52.19tn, prev: +IDR36.3tn). As the capital-to-monetary liabilities ratio did not exceed 10% (curr: 9.72%), BI did not have to deposit excess surplus to the govt.

From the bond market, FR 40, 84, 86, and 67, are currently the cheapest based on our yield curve model. Last national business day, the dollar index was closed at 97.15 (-0.5%). Rupiah was appreciated by 0.6% at USDIDR at 16,209. The 10yr UST yield was down by -4.9bps at 4.24% and 10yr INDOGBR was down by -2.5bps at 6.66% – the spread between the two was at 242bps.

Economy: US trade deals with nations met challenges ahead of deadline

Ahead of 9 Jul’25 deadline, US was expected to make deals with a dozen of countries, incl. Indonesia, Taiwan, South Korea, and Vietnam. For those countries making no deals, they would be imposed by higher tariffs set at 2 Apr’25, while countries putting good faith in negotiation would merely be charged 10% rates. Furthermore, Trump ended his trade talks with Canada, as the country continued to implement digital and services tax, with the first payment beginning on 30 Jun’25. Trump also considered Japan’s car trades to be unfair. He threatened to impose higher tariffs for those countries. Source: Bloomberg

Economy: data signaled US depressed consumer spending

In May’25, US Real Personal Spending dropped by -0.3% m-m (cons: +0.0% m-m, prev: +0.1% m-m), the worst contraction since the beginning of this year. Spending on goods declined by -0.8% m-m (prev: +0.0% m-m), while that on services was flat at +0.0% m-m (prev: +0.1% m-m). The results began to depict muted consumer spending. At the same time, PCE grew by +0.1% m-m (cons: +0.1% m-m, prev: +0.1% m-m), and the core figure was recorded at +0.2% m-m (cons: +0.1% m-m, prev: +0.1% m-m). Source: Bloomberg

Economy: BI surplus increased in 2024

In 2024, BI financial surplus was recorded at +IDR52.19tn (prev: +IDR36.3tn). The revenues were at IDR228.66tn, mainly supported by monetary policy implementation (curr: IDR226.89tn). Meanwhile, the central bank’s expenses hit IDR161.3tn, driven by monetary policy implementation of IDR84.07tn. Source: Kontan