Daily Flows

• For the last day of the month, there was two way flows in the NCD market.
• Issuers came to market in the BBB space and ADI’s were liquid enough to meet the demand.
• TD flow was mixed, 5.50% for 1 year was a standout from BBB banks.
• Activity may be lower today as investors choose to wait for clarity on monetary policy outlook.

U.S. Manufacturing Activity Continues to Lift

• The Chicago PMI rose to 42.8 for the month of July.
• This is up from 1.3 point from June and marks two months in a row of increasing.
• Although this print shows improvement, the manufacturing sector currently has historically low activity.
• A positive sign for the Fed is that it seems wages has eased considerably, reflecting the growing sentiment that inflation pressures are moderating.

RBA Today

• All eyes will be on the RBA’s interest rate decision today.
• Economists calling for a hike consider sticky inflation, a tight labour market, strong housing prices.
• Those predicting a pause consider softer CPI (coming in lower than RBA forecasts) , softer retail data and dovish rhetoric in recent RBA meeting.