Fixed Income Update 16 Apr 2026
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 16 April 2026
Cautious Markets Amid Uncertain Geopolitical Signals
US inflation is re-accelerating, driven primarily by energy prices, reinforcing a “higher-for-longer” rate outlook and strengthening the USD, tightening global liquidity and pressuring emerging markets. The Middle East conflict risks (especially around the Strait of Hormuz) are pushing up oil, gas, and commodity prices while disrupting trade routes, leading to higher global costs and slower industrial activity.
The government is actively containing inflation by holding subsidized fuel prices (Pertalite & Biosolar) flat through end-2026, supported by around IDR420tn fiscal buffer, while imposing a 50-liter purchase cap to limit leakage. Additional targeted support, such as aviation tax relief and cost controls, helps cushion sectoral pressures, preserving macro stability (deficit around 2.9% of GDP) even as risks persist from rising petrochemical input costs and unsubsidized energy exposure.
Regards,
KBVS Research Team