Daily Flows
- Yesterday, AMP’s (A-2/BBB+) 9-month rate of 5.10% continued to attract strong flows.
- Pockets of demand saw +50 for 3-month NCDs offered in the BBB space.
- As we approach the Christmas holidays, investors should expect bespoke opportunities to slow.
Australian PMI Data Continues to Suggest Slowdown
- The Judo Bank Australia Manufacturing PMI fell to 48.2 in December, down from 49.4, as new orders dropped at their sharpest pace since October and output declined amid worsening market conditions.
- Input costs rose at a faster rate due to higher material, transportation, and labour expenses. However, manufacturers remain optimistic about growth in 2025, with expectations of lower interest rates and improved business development.
- The Services PMI edged down to 50.4 from 50.5, reflecting marginal expansion. New business growth continued, but firms reduced staffing levels while raising selling prices to offset higher input costs.
- The S&P Global Flash Composite PMI slipped to 49.9 from 50.2, indicating a slight contraction in private sector activity, driven by manufacturing weakness and sharper declines in export orders.
- This result aligns with the recent weak GDP print. Rate cut expectations have been brought forward, with markets three weeks ago pricing in cuts around August. A significantly weaker employment print will likely be needed to push the RBA into action.