Daily Flows

• It was a quiet start to the month, with many banks looking for funding but market participants subdued placing out.
• Most of the flow was directed to a 6-month term deposit offering a rate of 5.25% from a Green-Friendly A-2/BBB+ Fitch-rated bank.
• Yesterday, the Westpac 3mBBSW+100 15/01/2029 was traded with Market participants selling the stock able lock in a significant capital gain since primary issuance.

A Balanced Decision From the Fair Work Commission

• The Fair Work Commission (FWC) decided to increase the minimum wage and award rates by 3.75% starting 1 July 2024, considering the rising cost of living and rejigged stage three tax cuts.
• The FWC’s 3.75% increase is lower than the previously forecasted 4.5%, leading to a downside risk for wage forecasts and will lower WPI expectations.
• The decision is expected to moderately influence other wage negotiations, though individual arrangement wage outcomes have already slowed, and enterprise agreement outcomes seem to have peaked.
• The RBA would likely be reassured by the FWC’s balanced decision, which considers both cost of living pressures and anticipated productivity improvements.