Daily Flows Update

• Westpac’s 5-year issuance priced yesterday at 3-month BBSW +84, matching the recent level seen in CBA’s issuance.
• Semi-government FRN trading has remained active throughout the week.
• A domestic NCD issuer offering +50 for 3–6 months is benefiting from an influx of additional funds.

Consumer Sentiment Dragged Down by Weak Aussie Dollar

• Australian consumer confidence dropped by 0.7% in January, following a 2% decline in December 2024. The Westpac-Melbourne Institute Consumer Sentiment Index fell to 92.1, indicating ongoing pessimism.
• Survey results weakened later in the period, likely driven by the Australian dollar’s depreciation against the US dollar, sparking negative sentiment around interest rates and the broader economic outlook.
• Economic expectations were mixed, with short-term confidence stable and slight improvement in five-year outlooks, though still below November levels.
• Persistent cost-of-living pressures and a weaker currency continue to weigh on consumer spending and economic activity.
• For the domestic rates market, the ongoing pessimism and mixed data support expectations for a cautious RBA easing cycle, especially amid global market volatility influencing Australian conditions.