Fixed Income Update 13 Mar 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 13 March 2025
The Trump Dance : Reigniting Market Volatility
Recent In an interview that aired Sunday (Mar 9, ‘25), on Fox News’ “Sunday Morning Futures With Maria Bartiromo” if he was expecting a recession this year, Trump said: ”I hate to predict things like that. There is a period of transition because what we’re doing is very big.” On Tuesday, (Mar 11, ’25), Donald Trump retracted his initial threat to double U.S. tariffs on Canadian steel and metal imports to 50%, just hours after announcing the measure. Consequently, the U.S. Dollar Index (DXY), the U.S. stock market, U.S. Treasury yields, and expectations for the Federal Reserve's interest rate decision have experienced volatility this week..
On March 11, ‘25, Fitch Ratings reaffirmed Indonesia’s Sovereign Credit Rating at BBB with a stable outlook. This decision reflects Indonesia’s solid medium-term economic growth prospects and low government debt-to-GDP ratio. Although government debt increased by 1.22% MoM in Jan ‘25, reaching IDR8,909.14 tn, it remains at a manageable 38.6% of GDP. The scheduled release of APBN Kita on Thursday, Mar 13, ‘25, is anticipated to reveal a -28.2% YoY decline in state revenue for Jan ‘25, alongside a -1.8% YoY decrease in government spending. As a result, the fiscal deficit is projected to reach IDR23.5 tn, or 0.10% of GDP. This development may trigger negative sentiment in the government bond (SUN) market for the remainder of the week. However, the decline in consumer confidence and the modest growth in domestic retail sales warrant attention, especially as these trends emerge ahead of the Ramadan and Eid spending cycle.
Regards,
KBVS Research Team