Daily Flows

• With an upcoming Westpac bond maturity there was plenty of rotation into the secondary market with attractive margins offered for 5 year major floating paper.
• Standout term deposit of 5.15% for 5 months and 5.20% for 10 months from an A-2/BBB+ ADI continues to be locked by market participants.
• With NCD activity quiet, outright levels around 4.80% for 3 month A-2 paper was commonplace yesterday.

Bullock Doubles Down On Hawkish Tone and U.S. Jobless Claims Recession Concerns

• Yesterday, Michelle Bullock reiterated the hawkish tone she delivered post RBA meeting.
• She made it clear that the upside risks would force the RBA’s hand to raise rates, stating that persistently high inflation the worser outcome.
• Overnight, The U.S. initial jobless claims fell 17K to 233K. Whilst this is second tier data, given the heightened sensitivity of markets it saw risk off trading ensue.
• U.S. equities rallied and U.S. treasury yields rose by up to 8 basis points at the shorter end of the curve.
• Historically, this time of year the jobless data is volatile and usually does not gainer such attention.
• Despite this it did help ease markets concerns surrounding recession fears.