With the RBA decision today, some market participants held off placing short end funds until post announcement.
The NCD market continues to have a strong bid tone, with margins of +50 for 3 months common place.
Term Deposit offerings continue to be offered at 5.80% for 1 year in the BBB space.
Domestic Housing Data
Yesterday, Building Permits MoM for May came in significantly higher than expected at 20.6% (forecasted 3.6%).
This rise can be in part due coming from a weak starting point of a -6.8% print last month and was also driven by a 150% increase in apartment developments for NSW.
The June CoreLogic home value index rose by 1.2% in June after a gain of 1.4% in May.
The building permits and steady rises in price gains continuing despite rising interest rates and persistent inflation reflect the prevailing data currently facing the RBA.
RBA Faces Goldilocks Decision
Currently the market is pricing in 20% chance of a rate hike and 13 out of 27 economists are forecasting a hike.
The prevailing data of a resilient housing market, a tight labour market, retail sales holding up and a persistent core inflation read can all be viewed as points that will lead the RBA to hike again.
On a global level, central banks have continued to reflect hawkish sentiment which may also factor into todays decision.
With the last two hikes taking the markets off guard the RBA may be inclined to pause to ensure a higher chance of the soft landing.
Either way, it seems more hikes are expected, its more a question of timing and how quickly the RBA want to continue.