EM ASIA CREDIT: Freeport Indonesia: Efforts to locate workers ongoing
(FRIDPT, Baa3/NR/BBB)
"*FREEPORT PROVIDES UPDATE ON PT FREEPORT INDONESIA OPS" - BBG
"*FREEPORT: EXTENSIVE EFFORTS ARE ONGOING TO CLEAR ACCESS ROUTES" - BBG
"*FREEPORT: NOT ABLE TO LOCATE WORKERS" - BBG
"*FREEPORT: MINING OPS IN GRASBERG REMAIN TEMPORARILY SUSPENDED" - BBG
Indonesian copper production ranks equal 6th in the world, alongside the U.S., with around 1.1 million tons annually. Indonesian company, Freeport Indonesia (FRIDPT), which is majority State owned, mines one of the world’s largest copper and gold deposits in the Grasberg minerals district in Papua, Indonesia.
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AUSSIE BONDS: Slightly Richer After Today's Q2 Wages Data
ACGBs (YM +1.5 & XM +0.5) are slightly stronger after today’s wages data.
- The Q2 WPI rose 0.8% q/q leaving annual inflation at 3.4% y/y after a recent trough at 3.2% in Q4 2024 and 4.1% in Q2 2024. Public sector quarterly wage gains outpaced the private sector for the third consecutive quarter at 1.0% q/q compared with 0.8%. Public wage growth is now up 0.1pp to 3.7% y/y, while private was 3.4% y/y. The RBA had forecast 3.3% for Q2 and in its August projections is expecting the WPI to trend lower to around 3% by Q2 2026. 2025 to date is showing some stabilisation in wage inflation.
- Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session.
- Cash ACGBs are flat to 2bps richer with a steeper 3/10 curve and the AU-US 10-year yield differential at -5bps.
- Expectations of sustained strong pricing at auctions proved accurate, with the latest round of ACGB Dec-35 supply seeing the weighted average yield print 0.22bp through prevailing mids. Moreover, today’s cover ratio rose to 3.2417x from 2.6500x.
- The bills strip is +1 to +3.
- RBA-dated OIS pricing is slightly softer across meetings today. A 25bp rate cut in September is given a 41% probability, with a cumulative 40bps of easing priced by year-end.
JGBS AUCTION: Poll: 5-Year JGB Auction
*JAPAN 5Y GOVT BOND AUCTION MAY HAVE 99.72 LOWEST PRICE:POLL – BLOOMBERG
JGBS AUCTION: 5Y Supply Faces A Higher Yield & Steeper Curve
The Japanese Ministry of Finance (MoF) will today sell Y2.4tn of 5-Year JGBs. MoF last sold 5-year debt on 8 July 2025.
- Yields on today’s offering are 5-10bps higher than last month’s issuance levels but remain 5-10bps below the cycle peak.
- The 2s/5s yield curve is 5bps steeper than last month and sits just below its cycle peak.
- Amid mixed to weak demand at recent auctions, today’s results will be closely watched for signs of continued softness.
- Results are due at 0435 BST / 1235 JST.
