Daily Flows

• 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.