{"id":6854,"date":"2026-05-25T02:51:43","date_gmt":"2026-05-25T02:51:43","guid":{"rendered":"https:\/\/himdasun.or.id\/?p=6854"},"modified":"2026-05-25T02:51:50","modified_gmt":"2026-05-25T02:51:50","slug":"global-bond-sell-off-and-body-the-new-export","status":"publish","type":"post","link":"https:\/\/himdasun.or.id\/en\/2026\/05\/25\/global-bond-sell-off-and-body-the-new-export\/","title":{"rendered":"Global Bond Sell-Off and Body the New Export"},"content":{"rendered":"

GLOBAL ECONOMY:<\/strong><\/p>\n\n\n\n

Iran-US tensions persisted throughout the week with no signs of near-term resolution. President Trump initially postponed a planned military strike on Iran following diplomatic appeals from Saudi Arabia, Qatar, and the UAE, before threatening renewed strikes within days if a deal is not reached. By week’s end, disputes over Tehran’s uranium stockpile and a proposed Strait of Hormuz toll system continued to cloud peace prospects, as Supreme Leader Mojtaba Khamenei ordered near-weapons-grade uranium to remain inside Iran. The Strait of Hormuz, through which roughly one-fifth of global oil and LNG supply previously transited, remained closed, while Brent crude swung in volatile. On the supply side, OPEC+ was projected to approve a moderate production target increase of 188k bpd for July 2026 at its 7 June meeting, continuing monthly supply hikes initiated in April despite ongoing Persian Gulf disruptions.<\/p>\n\n\n\n

Geopolitical pressure drove a deep global bond selloff and reinforced a hawkish central bank bias. US 10yr Treasury yields climbed to 4.52% (highest since June 2025) and the 30yr tenor touched 5.20%, the highest level since 2007 on the eve of the global financial crisis. CME FedWatch implied probability of a December Fed hike rose to over 33% (prev: 20.7%), reversing earlier expectations of two cuts in 2026, while the April FOMC minutes confirmed the hawkish shift with most officials warning of potential rate hikes if inflation runs persistently above the 2% target. The selloff extended into Asian markets, with Japan’s 10yr JGB yield hitting a 29-year high near 2.80% and the 40yr touching an all-time high of 4.395% ahead of a fragile JPY700bn 20yr bond auction. On the flow side, foreign holdings of US Treasuries declined 1.5% to USD9.348tn in March 2026, with Japan reducing positions by nearly 4% and China cutting holdings by 6% to USD652.3bn, the lowest since September 2008.<\/p>\n\n\n\n

DOMESTIC ECONOMY:<\/strong><\/p>\n\n\n\n

BI raised the BI-Rate by 50 bps to 5.25% on 19\u201320 May as an aggressive pro-stability move to reinforce the Rupiah against Middle East war volatility while anchoring inflation within the 2.5\u00b11% target. To complement the rate hike, the government initiated IDR2tn daily bond buybacks supported by IDR435tn in cash reserves and started marketing 5yr and 10yr overseas bonds targeting USD3bn. The defensive policy mix came against a worsening external backdrop, as 1Q26 BoP swung to a deficit of -USD9.15bn (prev: surplus +USD6.07bn) with the Current Account deficit widening to -USD4.01bn or -1.09% of GDP (prev: -0.67%).<\/p>\n\n\n\n

To centralize control over strategic natural resource exports and curb persistent under-invoicing in sectors making up 60% of national exports, the government established PT Danantara Sumberdaya Indonesia on 19 May under the Danantara sovereign wealth fund \u2014 initially covering coal, palm oil (CPO), and ferro-alloys, with a full SOE take-over of all contracts, shipping, and payments by 1 September 2026. In parallel, the government issued PP 21\/2026 requiring natural resource exporters to repatriate 100% of export proceeds starting 1 June 2026. Rosan Roeslani appointed Luke Thomas Mahony, a former PT Vale Indonesia (INCO) director, as the entity’s CEO.<\/p>\n\n\n\n

On the fiscal side, the government drafted a new scheme to restrict subsidized Pertalite and Biosolar purchases based on vehicle types and engine displacement. To broaden Rupiah support, BI expanded eligible NR export proceeds placement instruments to include FX-denominated SUN and SBSN Valas, with tenor extended to 12 months and Chinese Yuan added to eligible currencies. Market reaction was mixed, with the JCI closing 3.5% lower on Tuesday amid speculation over the scale of the new export-monopoly entity.<\/p>\n\n\n\n

DOMESTIC BOND MARKET:<\/strong><\/p>\n\n\n\n

Govt. bond ownership flow:<\/strong><\/p>\n\n\n\n

As of 19 May\u201926, banks recorded an outflow of -IDR81.2tn w-w to the govt. bonds, making up to IDR1,166tn or ~17.1% of total ownership in the govt. bonds. On the other hand, the central bank recorded an inflow of +IDR96.8tn w-w to the total of IDR1,885tn or ~27.6% of total ownership in the govt. bonds. From the non-bank investor classification, inflow was recorded at +IDR13.7tn w-w to the total of IDR3,784tn or ~55.4% ownership from total. Foreign investors also saw an outflow of -IDR1.2tn w-w this week to the total of IDR867tn or ~12.7% of govt. bond ownership to total.<\/p>\n\n\n\n

Important event next week
<\/strong>\u00b7       Sat (23\/05): <\/strong>–
\u00b7       Sun (24\/05): <\/strong>–
\u00b7       Mon (25\/05): <\/strong>–
\u00b7       Tue (26\/05): <\/strong>(USA) Conf. Board Consumer Confidence
\u00b7    Wed (27\/05): (<\/strong>USA) MBA Mortgage Applications, (Indonesia) Bloomberg May Indonesia Economic Survey
\u00b7    Thu (28\/05): <\/strong>(USA) Personal Income, Personal Spending, Durable Goods Orders, Initial Jobless Claims, GDP Annualized QoQ, New Home Sales<\/p>\n\n\n\n

\u00b7     Fri (29\/05): <\/strong>(USA) Wholesale Inventories MoM, MNI Chicago PMI, (Japan) Tokyo CPI Ex-Fresh Food YoY, Jobless Rate, Job-To-Applicant Ratio, Industrial Production MoM<\/p>","protected":false},"excerpt":{"rendered":"

GLOBAL ECONOMY: Iran-US tensions persisted throughout the week with no signs of near-term resolution. President Trump initially postponed a planned […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[7],"tags":[],"class_list":["post-6854","post","type-post","status-publish","format-standard","hentry","category-market-research"],"_links":{"self":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts\/6854","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/comments?post=6854"}],"version-history":[{"count":1,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts\/6854\/revisions"}],"predecessor-version":[{"id":6855,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/posts\/6854\/revisions\/6855"}],"wp:attachment":[{"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/media?parent=6854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/categories?post=6854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/himdasun.or.id\/en\/wp-json\/wp\/v2\/tags?post=6854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}