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.
The rupiah rose to the highest level in almost three weeks after members of the euro area agreed on measures to tackle the debt crisis, supporting riskier assets before data today that’s forecast to show Indonesia’s trade balance swung to a surplus.
Asian currencies rose, led by Malaysia’s ringgit, after economic data showed two of the region’s largest economies were proving resilient to slowing global growth, boosting demand for emerging-market assets.