Daily Flows & Insights – Business Conditions Weaken and Consumer Sentiment Remains Low

Daily Flows

  • 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.
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Curve Team
Jack Pedersen