Indonesia’s two-year bonds rallied, pushing the yield toward a record low, on speculation investors are favoring shorter-term notes to guard against price swings ahead of a central bank meeting today. The rupiah fell.
Indonesia’s yield curve steepened, with the spread between two- and 10-year notes near the widest since June, after inflation quickened to the fastest pace in 20 months. Rupiah forwards rose for the first time in three days.
Indonesia’s two-year bonds advanced, pushing the yield to a 13-month low, as investors favored short- dated notes on concern a push to reduce the burden of fuel subsidies on the budget will spur inflation.