Group 1 - The expectation of interest rate cuts by the Federal Reserve is boosting the Asian bond market, with Indonesian bonds positioned to be the biggest beneficiaries [1][4] - Indonesian benchmark government bond yields are close to 6.5%, making them one of the highest-yielding sovereign bonds in Asia, which enhances the attractiveness of Indonesian rupiah bonds [1] - The Indonesian central bank's focus on stabilizing the currency allows for further monetary easing without the concern of currency depreciation, especially in a weakening dollar environment [1][3] Group 2 - The correlation between the dollar and Indonesian 10-year government bond yields has reached its highest level since July 2024, indicating that a weaker dollar will support the appreciation of the rupiah and lower bond yields [3] - Indonesian 10-year government bond yields fell by 9 basis points, marking the largest decline in emerging Asia, following a drop in U.S. Treasury yields due to disappointing non-farm payroll data [3] - The current yield spread between Indonesian and U.S. 10-year government bonds is approximately 220 basis points, which is 1.1 standard deviations below the five-year average, indicating increased sensitivity of Indonesian bonds to U.S. Treasury yield fluctuations [3] Group 3 - The expectation of further interest rate cuts by the Indonesian central bank is anticipated to alleviate some concerns regarding fiscal deficits, with the central bank having already cut rates by 75 basis points this year [3] - GAMA's De Mello predicts that the Indonesian central bank will implement at least two more 25 basis point cuts by the end of the year, supported by the Federal Reserve's easing cycle [4]

Group 1 - The Australian dollar (AUD) has strengthened against the US dollar (USD), currently trading around 0.6400, following a significant rise in Australian consumer inflation data that exceeded market expectations [1] - The unexpected increase in inflation has diminished market bets on further interest rate cuts by the Reserve Bank of Australia (RBA), leading to a reassessment of the AUD's interest rate differential advantage [1] - The current upward momentum of the AUD is supported by a robust domestic economic outlook compared to the uncertainty surrounding Federal Reserve policies, as well as a technical breakout that has attracted trend traders [1] Group 2 - A daily closing price for AUD/USD above the resistance zone of 0.6515-0.65156 would confirm a breakout and potentially open the path to 0.6549, which corresponds to the 38.2% retracement level of the decline from September to April [2] - Stronger upward momentum could extend to levels of 0.6699 and 0.6758, both of which are within long-term retracement ranges [2] - If the AUD fails to maintain above the 200-day moving average at 0.6461 and the short-term 50.0% retracement level at 0.6428, bearish sentiment may increase, with the previous range high at 0.6380 becoming a key support level [2]