Daily Flows & Insights – Business Conditions Remain Subdued And Household Spending Slows

Daily Flows

  • Investors took advantage of 12 month deposit rates of 5.35% yesterday from multiple A2 names looking for funds.
  • NCD levels remain attractive at +50 for 3 months and +55 for 6 months, with the latter representing an outright level of close to 5.20%.
  • Longer-duration deposits remain attractive with 5 year levels at 5.35% from an A1/A name.

Business Conditions Remain Subdued And Household Spending Slows

  • Employment, trading, and profitability indicators all fell in April as NAB released its monthly business conditions survey yesterday.
  • Business confidence remained unchanged last month at levels below the long-run average as the survey pointed to a continued economic slowdown.
  • Poor showings in the retail, finance, and property industries were offset by boosts in construction and manufacturing amidst moderating labor and input purchases.
  • Meanwhile, CBA released data showing household spending fell 1% in April, slowing to growth of 2.6% across the year.
  • Spending on education and utilities grew 3.7% and 2.5% respectively as households cut back on food & beverage (-3.8%), hospitality (-3.3%) and recreation (-2.6%), with overall discretionary spending down 4.4% as households cut back after Easter feasting
  • The federal budget is out tonight with a surplus north of $9b projected by Treasurer Jim Chalmers for the first back-to-back surplus since the GFC – with large deficits expected to follow.
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Curve Team
Josiah Binet