The SUN Benchmark is relatively flat, amid investor attitudes that tend to wait and see. In addition to data on US June inflation at the consumer and producer levels, which remain high, investors will wait and see to determine BI’s RDG figures for the third Thursday of the upcoming week. On the other hand, the potential for US inflation remains high, prompting the Fed to raise the FFR between 50 bps – 75 bps at the end of July.

Corporate Bonds
PT KAI Issues IDR 2 Trillion Bonds and Sukuk. PT Kereta Api Indonesia (Persero) will issue bonds and sukuk with a total value of IDR 2 trillion for expansion capital and debt repayment. This bond received a double A plus or AA + rating from PT Pemeringkat Efek Indonesia (Pefindo). PT KAI issues sustainable bonds I phase I 2022 amounting to IDR 1.5 trillion, from the target ceiling of IDR 2.2 trillion. The bond issuance coincides with the issuance of the 2022 Sustainable Sukuk Ijarah Phase I of IDR 500 billion, from the target ceiling of IDR 800 billion. (Bisnis Indonesia)

Domestic Issue
BI: On the Potential Increase in Benchmark Interest Rates. Bank Indonesia (BI) said it would remain vigilant about inflationary pressures and their impact on inflation expectations. In addition, BI is also ready to adjust interest rates if there are signs of higher core inflation. For the record, rising inflation was driven by pressure from the supply side due to rising international commodity prices. However, according to BI, core inflation is still within the target range. Data from the Statistics Indonesia (BPS) recorded inflation in June at 0.61% MoM and 4.35% YoY. (Kontan) (Kontan)

Hawkish aggressive FFR 100 Bps required, US inflation breaches 9%. FFR Futures support a 100 bps rate hike at the end of July, to reduce Headline Inflation or June CPI which reached 1.3% MoM (Vs. May 1.0% MoM) and 9.1% YoY (Vs. May 8.6% YoY ). Inflation in June was driven by spikes in fuel and natural gas prices, which rose 11.2% MoM and 8.2% MoM, respectively. The increase also occurred in core inflation, with CPI Ex. Food and Energy which reached 0.7% MoM (Vs. May 0.6% MoM) and 5.9% YoY (Vs. May 6.0% YoY). This raises the question of how severe the impact of the Fed’s aggressive Hawkish on a potential US economic recession will be, and has again boosted the safe-haven interest in UST10Y and USD. Yesterday, the Dow Jones led the pressure on Wall Street stocks, closing down 0.7%.

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