INDONESIA: USD/IDR Nears 16900, CDS Eyed For Further Signs Of Stress/Concern

• Following on from the release of further price decrease in new and used homes, November property Investment and Property Sales fell to lows of the year.  
• Property Investment YTD YoY fell -15.9%, the lowest in more than 3-Years.
• New home sales value fell -11.2% YoY, new property construction fell -20.5% YoY.  
• The fall in Residential Property sales accelerated in November to -11.2%, from -9.4% YoY, the largest drop in 2025.  
• The combined result is the worst in 5-Years
• The weakness in consumer is the challenge right now as the property sector declines continue.  Finding a way of halting the slide in prices and hence investment must be key to start the process of rebuilding consumer sentiment. 

The BBDXY range Friday night was 1206.07 - 1208.53, Asia is currently trading around 1206, -0.02%. The USD has failed to react to a weak close in US stocks or US yields in the long-end moving higher. Is it lagging or correctly seeing the moves as unconvincing that probably won’t follow through, or could it also be pricing in the potential Supreme Court decision that some believe is imminent. On the day look for initial resistance again back towards the 1208-1209 area and above here the more important 1212-1214 area where sellers should remerge initially. Support is in the 1204/05 area; a move below here would target 1198-1200. 

• The move in metals is gaining real traction and is providing real headwinds for the USD as the “debasement theory” again comes to the fore.
• Barron’s: “The Supreme Court could soon rule whether President Donald Trump’s tariffs are legal—a decision that will have far-reaching implications on the extent of the president’s powers.”   https://www.barrons.com/articles/supreme-court-trump-tariff-decision-case-41bd5ce4
• The BBDXY Average True Range for the last 10 Trading days: 379 Points

Fig 1: BBDXY Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The cash ACGB 10-year is 1bp cheaper today, with the AU–US 10-year yield differential at +56bps. At this level, the differential sits just below its cycle high set earlier this month, the widest since mid-2022.

• December’s price action has consolidated the differential’s breakout above the ±30bps range that had prevailed since November 2022. This widening has occurred alongside a steady increase in market-implied expectations for the RBA cash rate.
• Indeed, a simple regression of the 10-year yield differential against the AU–US 1-year forward 3-month swap rate (1Y3M) differential over the past two years suggests the current spread is around fair value.

Figure 1: AU-US Cash 10-Year Yield Differential (%)

Source: Bloomberg Finance LP / MNI