INDONESIA: Country Wrap: Weak IDR Weighs on Budget
Jul-07 05:17
- The Indonesian government will need to allocate Rp 552.14 trillion (approximately $34 billion) in the 2025 state budget solely to service interest on its public debt, according to projections released by the Finance Ministry on Sunday. The total consists of Rp 496.98 trillion in domestic interest payments and Rp 55.1 trillion in interest on foreign debt. “For the second half of 2025, interest payment obligations are projected to reach Rp 295.05 trillion -- Rp 261.83 trillion in domestic interest and Rp 33.22 trillion in foreign interest,” the ministry said in its fiscal outlook. A weakened rupiah in the first four months of this year has contributed to rising costs on foreign-denominated debt. However, the currency has shown signs of strengthening over the past two months and is expected to remain relatively stable throughout the second half of 2025. (source Jakarta Globe)
- Australia is hoping that the upcoming review on its trade agreement with Indonesia will make room for critical mineral cooperation, particularly on lithium, according to its diplomat. Indonesia already has a comprehensive economic partnership agreement (CEPA) with Australia, a deal that not only grants zero tariffs for virtually all products, but also provides greater certainty for investors. The Indonesia-Australia CEPA came into effect in 2020. When Australian Prime Minister Anthony Albanese visited Jakarta in mid-May, the two economies agreed to review the CEPA trade pact next year for improvements. (source Jakarta Globe)
- The Jakarta Composite has had a slow start to the week, down just -0.05%.
- The Rupiah is down -0.35% on regional weakness, at 16,241
- Bonds were mixed with the front end rallying whilst the 10YR is lower by -0.05bp at 6.58%.
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JGB TECHS: (M5) Rallies Off Lows
Jun-06 22:45
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 139.19 @ 15:53 GMT Jun 06
- SUP 1: 138.54 - Low May 22
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have rallied off recent lows, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: June 2025
Jun-06 21:24
We've just published our UST Issuance Deep Dive - Download Full Report Here
- May’s refunding round saw guidance as well as coupon sizes for the current quarter unchanged.
- The August round (Jul 28-30) could prove more compelling, reflecting both pressure at the long end of the Treasury curve as well as a shifting fiscal outlook amid tariff revenues contrasted with impending tax cuts (not to mention the likelihood of approaching the debt limit at around that time if it’s not lifted).
- Future Coupon Upsizing: We’ve seen some expectations that Treasury could lean against some of those trends in the August refunding, with potential signals if not immediate action on adjusting buybacks or even reducing issuance duration in order to reduce pressure on the long end. MNI’s current expectation is that coupon sizes will only be increased in early 2026. We will update in our next Deep Dive at end-June, with our full refunding preview coming in late July.
- Upcoming issuance: June is set to see $315B in nominal Treasury coupon sales, in addition to $23B in 10Y TIPS and $28B FRN for a total of $366B. Sales for the month start in the coming week, on Tuesday June 10 with $58B of 3Y Note, Wednesday June 11 with $39B of 10Y Note, and Thursday June 12 with $22B of 30Y Bond.
- May Auction Results: Against a backdrop of continued steepening pressure for global sovereign curves, May’s coupon auctions saw strong sales at the short-end/belly contrasted with tails at the long-end.
US FISCAL: Extraordinary Treasury Measures Tick Up As Cash Depletes
Jun-06 20:20
Treasury had $84B in "extraordinary measures" available to keep the government financed as of June 4 per a release Friday. That is up from $68B a week earlier though Treasury has exhausted three-quarters of the total initially available ($362B) when the debt limit impasse began in January.
- Combined with a pullback in Treasury cash ($376B), the total resources available to avert an "x-date" in the summer are down to a total $460B, the lowest since April 10 before the annual tax take accelerated.
- There will be another uptick in Treasury cash late next week/early the following week around the mid-June tax date, but this is likely to be the last major uplift before the summer at which point x-date speculation will pick up if Congress hasn't passed a debt limit increase by then.
