Fixed Income Update 15 May 2025
KBVS WEEKLY FIXED INCOME UPDATE
Thursday, 15 May 2025
TOTAL RESET ON TARIFFS
The meeting between U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng brought renewed optimism to global markets, as it marked progress in trade war negotiations between the two countries. As a result, both parties agreed to reduce their respective tariffs by a combined 115%—China by 10% and the U.S. by 30%—and committed to further dialogue on retaliatory tariffs to achieve a more balanced trade relationship. This has helped ease market concerns and fostered more optimism about the future of both countries’ economies.
In the domestic market, recent improvements in the Consumer Confidence Index and Retail Sales have supported positive market sentiment. Meanwhile, the decline in FX reserves likely reflects rupiah stabilization efforts by the central bank. On the other hand, the government plans to impose restrictions on cassava and tapioca imports in an effort to maintain stable domestic prices.
Regards,
KBVS Research Team