Daily Flows

• Yesterday saw activity across the floating semi-government lines issued by QTC, TCV, and WATC.
• AMP (A-2/BBB+) continues to lead with competitive rates of 5.05% for 3 months, 5.10% for 6 months, and 5.05% for 9 months.
• With mid-month inflows, any bid tone in the NCD space may be absorbed by surplus funds.

US CPI Comes in Softer Than Expected, Easing Market Tensions

• Core CPI in the US for December increased by 0.2% MoM, falling short of the anticipated 0.3%, marking the smallest rise in six months. Headline CPI met expectations at 0.4% MoM and 2.9% YoY.
• Core service prices rose 0.3% MoM, primarily driven by shelter inflation, while core goods prices edged up 0.1% MoM. Services excluding housing and energy rose by just 0.2%, the weakest growth since July.
• Australian bond markets are likely to benefit from the rally in US Treasuries, with lower yields expected to support demand for domestic fixed-income securities.
• Softer-than-expected US inflation data and dovish repricing in global markets strengthen the case for a cautious RBA approach, as external conditions remain a significant influence on Australian monetary policy.