Government Bond Highlights
Indonesia Composite Bond Index (ICBI) closed lower by 0.70% to 239.34. The decline in prices of the government’s bonds aligns with the correction of bond markets in emerging economies. The U.S. economy faces the headwind of murky economic outlook, resulting in recession. This backdrop was initially fueled by the inversion yield of the U.S. Treasury with 3 and 5 years tenors occurred on December 4th, 2018. Yields of the U.S. Treasury with 5 years tenor should be higher than yields of the U.S. Treasury with 3 years tenor because investors look for higher yields. The U.S. volatile economy causes capital inflows to emerging markets with less risky instruments.
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