Fixed Income Update 10 Jul 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 10 July 2025
Trump Reprises His Tariff Play, Timing It Strategically Amid escalating global trade tensions, President Trump announced additional reciprocal tariffs on 7 Jul ‘25, following his initial 2 Apr declaration.
• These include new duties on several countries—such as 30% on China, 20–40% on Vietnam, and 10% on UK exports—effective after a 90-day pause that ended July 9.
• Tariffs are set to take effect 1 Aug, with exemptions for companies relocating production to the U.S.
• Trump also warned that nations aligning with BRICS would face an additional 10% tariff.
• Sector-specific tariffs have also been imposed, including 50% on copper, steel, and aluminum; 25% on autos; and a proposed 200% on pharmaceuticals.
In response, Indonesia’s Economic Affairs Minister is scheduled to meet with U.S. officials to discuss the implications of Trump’s tariff policies. Domestically, Indonesia’s Ministry of Finance and Parliament (DPR) finalized the 2026 State Budget (APBN) assumptions on 7 Jul. Key projections:
• Economic Growth : 5.2%–5.8%
• Inflation : 1.5% - 3.5%
• Rupiah ER : IDR16,500 – IDR16,900 per USD
• Yield SUN10Y : 6.6% - 7.2%
• Unempoyment Rate : 4.44% - 4.96%
• Poverty Rate : 6.5% - 7.5%
• Fiscal Deficit : 2.53% of GDP
Regards,
KBVS Research Team