Fixed Income Update 02 Jul 2026
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 2 July 2026
Rising Inflation Amid Fragile Geopolitical Calm
Globally, Middle East geopolitical tensions remained elevated despite renewed diplomatic engagement between the US and Iran. Although energy exports from major Gulf producers remain uninterrupted, oil prices edged higher as markets repriced geopolitical risks, suggesting that financial markets will remain highly sensitive to further diplomatic and security developments in the region.
Indonesia's inflation accelerated more than expected in Jun '26, supported by higher administered prices after fuel price adjustments and sustained food inflation amid domestic supply constraints. Meanwhile, Indonesia's trade balance unexpectedly reversed into a deficit of USD1.61 bn in May ’26, marking the country's first monthly trade deficit after 72 consecutive months of surpluses and the largest deficit since Apr '19.
Regards,
KBVS Research Team