Daily Flows

• Flow continues to be directed to 5-year TDs offered at 5.15% from an ‘A’ rated counterparty.
• Market participants are having to shift their investment strategy, locking in longer fixed exposure making sure they maximise returns in a declining interest rate environment.
• Today, RACQ is launching a 3-year Medium-Term Note. The price guidance is at 3m BBSW +165, and it has already attracted $100 million in volume.

Increased Supply Sees The U.S. Yield Curve Shift Out

• Overnight, U.S. Treasury yields rose higher ahead of supply across the curve. The Australian yield curve followed suit with rises in 3- to 10-year government bond yields.
• With little data yesterday, markets look ahead, especially in the U.S.
• There are a number of key prints including Durable Goods, GDP & PCE.
• This collection, paired with over 8 Fed speakers this week, will provide a clear picture to markets on future interest rate policy and economic outlook.
• It would not be surprising for added certainty to see movements in the yield curve as markets recalibrate off the incoming data.