- Market participants who have funds to place in the TD market should consider acting quickly as ADIs typically experience mid month inflows.
- Yesterday, the demand tone was still strong across the system, with 5.65% for 6 month and 5.75% for 12 months attracting flow.
- NCD spreads are being offered at +55 by foreign BBB banks. Domestic levels are at +50 for new funds.
Business Conditions Weaken and Consumer Sentiment Remains Low
- Yesterday, Melbourne Consumer Sentiment index rose by 2.7%, from 79.2 to 81.3 in July.
- This increase in confidence seems to be attributed to a surface level weaker inflation print in May 2023.
- Overall however, the index remains in deeply pessimistic levels and has been for an extended time as cost of living and higher interest rates weighs on consumers.
- NABs business confidence index rose from -3 to 0 for June 2023, beating market expectations of -1.
- Business conditions came in at above average level of 9 and measure of sales printed at 14.
- Forward orders, viewed as a leading indicator of demand climbed from -5 to -2.
- Capacity utilisation eased slight to 83.5% but still remain above average.
- Overall both prints do not show significant changes to current demand in the market.
- The RBA will have to keep monitoring incoming data as they try to discern an appropriate terminal rate.