- There has been high trading volume of the 3yr & 5yr CBA issuance in the secondary market.
- TD activity was quiet yesterday. An ‘A’ rated ADI continues to suck up funds with an offering of 5.27% for 12 months.
- The bid tone in the NCD market has subsided, with +50 for 3 months only being offered by foreign branch banks.
Central Banks Face The Goldilocks Conundrum
- The FOMC minutes taken at the last Fed meeting revealed that majority of participants agreed that there is significant upside risks to inflation, which could require further tightening.
- There was a minority that saw downside risks to the economy and believed the current policy rate is restrictive enough.
- As is the dilemma for most banks, they face the goldilocks conundrum.
- What level of monetary policy will return price stability in a reasonable time without breaking the economy.
- Equities sold off slightly and bond yields rose slightly higher.