Optimistic IKK sentiment and China’s trade surplus, colored the SUN trade yesterday. The BI IKK for the May period rose significantly to 128.9 (Vs. Apr. 113.1), as people’s mobility will drive economic recovery. Meanwhile, China recorded a trade surplus in May of USD 78.7 billion, driven by exports growing up to 16.9% YoY (Vs. Apr. 3.9% YoY), but with imports only rising 4.1% YoY. FR0091 is still under pressure, recording a 3.5 bps yield increase to 7.18%.

Corporate Bonds
Mandala Multifinance Bonds Achieve idA Rating. PT Pemeringkat Efek Indonesia (Pefindo) has reaffirmed its idA rating for its Shelf-Registered Bond IV Phase III/2021 Series A of IDR 150.0 billion which will mature on August 13, 2022. Then the Shelf-Registered Bond III Phase III/2019 Series B of IDR 68, 0 billion which will mature on 27 August 2022 issued by PT Mandala Multifinance Tbk (Mandala Finance). (Kontan)

Domestic Issue
Carbon Tax Applicable July 1, 2022. The Fiscal Policy Agency of the Ministry of Finance said the carbon tax will be implemented starting July 1, 2022. The carbon tax will be implemented in stages. First, it will be charged for coal-fired power plants (PLTU). Going forward, a carbon tax will be applied to all sectors that are required to comply with the Nationally Determined Contribution (NDC) document. Previously, the Minister of Finance said the carbon tax would be implemented on April 1, 2022, the Government would impose a carbon tax of IDR 30/kg. (CNN Indonesia)

ECB rate hike signal, raising investor concerns ahead of US CPI data. The ECB will end quantitative easing on July 1, raise interest rates by 25 bps at the end of July, and potentially be more aggressive in September. Investors are looking forward to the Fed’s response, as the US May CPI is projected to be 8.3% YoY, or very far from the 2% target. This has the potential to make the Fed more Hawkish in September, after the June and July FFRs which are projected to rise by 50 bps each.

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