Fixed Income Daily Update - August 12, 2026

Retail sales are expected to grow 0.9% YoY in Jul-26, with the Real Sales Index (RSI) reaching 224.4, supported by spare parts and accessories (+10.8% YoY) and household equipment (+2.5% YoY). However, sales are projected to decline 0.3% MoM, suggesting household consumption is improving only gradually rather than signaling a broad-based recovery in purchasing power.

Consumer Confidence Index (CCI) declined to 116.8 in Jul-26 from 117.8, its lowest level since Apr-25, reflecting weaker perceptions of job availability and durable goods purchases. Despite remaining above 100, softer confidence reinforces downside risks to household consumption in 2H26 following 5.06% YoY growth in 2Q26, although BI’s room for easing remains constrained by Rupiah stability and external risks.

**Foreign SBN ownership recorded a net inflow of IDR11tr YTD, concentrated in the 2–5Y (IDR79tr) and <1Y (IDR21tr) tenors, highlighting continued preference for shorter duration.** However, demand has started to broaden toward longer tenors, with 5–10Y and >10Y attracting IDR9tr and IDR7tr over the past month, respectively, suggesting investors are gradually adding duration as domestic risk perception improves.

The Rupiah weakened slightly to IDR17,840/USD, while SBN continued to outperform UST, with the 10Y INDOGB yield falling to 7.23% despite the 10Y UST rising to 4.73%, while the 2Y INDOGB remained below 7% at 6.98% as the 2Y UST increased to 4.26%. Consequently, INDOGB–UST spreads compressed to 250.0bps (10Y) and 272.7bps (2Y), while Indonesia’s 5Y CDS declined toward 88bps, indicating an easing domestic risk premium despite higher UST yields, although further SBN gains will require sustained inflows as spreads become increasingly compressed.