Government Bonds
The 10-year UST yield fell from 1.42% to 1.40%, amid the wait for the Fed’s Jerome Powell speech on monetary policy. Market participants expect the Fed’s loose monetary policy to be maintained, until the labor data and inflation target improve. Based on data from the NHKSI Fixed Income Department, yields on FR0086 and FR0087 closed at 5.32% and 6.35%, respectively, at the close of trading yesterday.

Corporate Bonds
Pefindo: Astra Sedaya Finance Bonds Achieve idAAA Rating. The Indonesian Securities Rating Agency (Pefindo) has affirmed its idAAA rating for the IDR 1.027 trillion Shelf-Registered Bonds Phase I/2020 Series A issued by Astra Sedaya Finance (ASF) which matures on September 12, 2021. Pefindo said the Company’s readiness to repay the bonds was supported by cash and cash equivalents of IDR 574 billion at the end of March 2021. The company also receives income from installments of financing receivables of around IDR 2.5 trillion per month. (Kontan)

BI: 2Q21 Manufacturing Performance Improved. Manufacturing sector performance improved and was in expansion phase in 2Q21. This is reflected in Bank Indonesia’s Prompt Manufacturing Index (PMI-BI) which was recorded at 51.45% in 2Q21. This index increased from 50.01% in 1Q21 and is also much better than 2Q20 which is currently in the contraction zone alias at 28.55%. The increase in PMI-BI is driven by increased activity and public demand during Ramadan and Eid, and is supported by the smoothness and availability of production facilities. (Kontan)

Surplus Trade Balance. Investors are looking forward to the release of trade balance data for June, which is projected to return a surplus of USD 1.8 billion. This projection is lower than the realization in the previous month which was a surplus of USD 2.3 billion. On the other hand, market participants are still closely watching the impact of the extension of the Emergency Micro PPKM. Previously, Sri Mulyani projected that Indonesia’s economic growth in 3Q21 would slow down to 4% to 5.4%. Meanwhile, the 4Q21 period is expected to grow 4.6% to 5.9%.