Daily Flows
- Last week, trading was centred around the shorter end of the curve, with 5.12% for 6 months being the standout rate in the NCD space.
- Bond activity was focused on domestic broader-sector paper, with trading in Newcastle Permanent and Auswide Medium Term Notes.
- As we approach December, there may be opportunities to lock in above-market rates, as banks look to beat the Christmas rush and secure funding early.
Australian PMI Shows Dismal Private Sector Output & The Week Ahead
- On Friday, domestic PMI data showed both services and manufacturing coming in below 50 (Services: 49.6, Manufacturing: 49.4).
- Input cost inflation eased to its lowest level since mid-2023, while output prices softened, indicating reduced pass-through pressures. Export orders rose slightly, but overall demand weakness persists.
- Private sector growth remains subdued, serving as an early indication that the RBA’s GDP forecast of 0.7% QoQ may be optimistic.
- Evidence continues to point towards below-trend economic growth, softening wage pressures, and a broadly intact disinflation trajectory, aligning with expectations of a gradual easing in inflationary risks.
- Looking ahead this week, in the U.S., FOMC minutes, PCE, and GDP data will keep markets busy.
- On the domestic front, we have monthly CPI data and a Michelle Bullock address on Thursday night.
