Government Bond Highlights
At the government bonds (SUN) auction dated 04/17/2018, the government absorbed the fund of IDR6.35 trillion from the total incoming bid of IDR10.18 trillion. The amount absorbed was lower than the indicative target of IDR8 trillion. SPN-S 04102018, SUN with 6-month tenor and the value of IDR4.3 trillion, obtained the biggest bid of IDR4.3 trillion. Indonesia Composite Bond Index (ICBI) closed lower by 0.66% into 244.32 in last week.
The 10-year U.S. Treasury yield stood near 3% caused by the hike in commodities prices spurring the expectancy of upbeat inflation. The hike in the U.S. Treasury yield reaching the highest level since January 2018 was underlined by the expectancy of the hike in Fed Fund Rate estimated to pace faster than early year estimate. The hike in the 10-year U.S. Treasury yield higher than 3% was the psychological limit of institutional investors allocating fund in the bonds markets and capital markets.
However, the equity markets were relatively stable backed by the optimism about the earnings seasons and the stable trade war tension between the U.S. and China.
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