High-yield contest in new phase as Indonesia-India spread jumps

Indonesia's 10-year bond yield climbed three basis points on Wednesday to 6.89%, after India's slid 18 basis points the previous day to 5.94%

The contest between emerging Asia’s two high-yield sovereigns appears to be entering a new phase as the extra yield on Indonesia’s 10-year bonds over India’s jumped by the most since May.

The premium on Indonesia’s benchmark bonds over their South Asian peers climbed from near the lowest in five months on Tuesday as India’s yields tumbled after the central bank announced measures to boost demand for the nation’s debt. At the same time, Indonesia’s yields have been creeping higher amid news that parliament is seeking law changes that might risk the central bank’s independence.

Indonesia’s 10-year bond yield climbed three basis points