The RBA rate hike on Tuesday has seen rates lift considerably. Paired with a shortage of funds in the system, the TD and NCD markets are experiencing the highest outright levels for the year.
Market participants have been eager to lock in elevated levels for a longer term as we near the end of the rate hike cycle.
5 Year TD offerings of 5.30% are being actively pursued in the BBB space.
3 Month NCD outright levels have now reached 4.70%.
Australia’s Trade Surplus Shrinks
Australia’s Balance of Trade surplus decreased from $14.8Bill to $11.15Bill, with the consensus being $14B.
Overall exports dropped by 5% and imports rose by 2%.
Monthly trade surpluses have been consecutive since Jan 2018, supported by sales in iron ore and natural gas to our regional trade partners.
Travel exports rose by 13.8% for April.
This figure suggests increased tourism and international students are continuing to flow.
Even with todays drop in exports, the trade surplus will support second-quarter GDP after reducing growth in the Q1.