Daily Flows
- Yesterday, we saw active trading in the TCV 2031 FRN, with balance sheet managers keen to pick up the highly liquid security.
- The best term deposit rate observed was 4.70% for 12 months, offered by domestic A-2/BBB+ non-fossil fuel counterparties.
- NCD margins of +45 for 3 months remain, with a bid tone persisting in the market.
Budget Night Recap
- The 2025 Federal Budget was released last night, forecasting a $27.6 billion deficit for 2024–25, a sharp turnaround from the $15.8 billion surplus in 2023–24.
- The deficit is expected to widen further to $42.1 billion in 2025–26, with ongoing shortfalls projected across the forward estimates.
- Cost-of-living support measures—including electricity rebates, increased Medicare funding, and tax cuts—drove much of the new spending.
- Structural expenditure pressures remain elevated, particularly across NDIS, aged care, and defence, while off-budget commitments have also increased.
- The budget’s dominant risk has shifted from inflation to global trade disruptions, with a slowdown in global growth presenting near-term challenges.
- Overall, the budget signals fiscal expansion in the near term, but comes as the Australian economy continues its disinflation process.
