Daily Flows

• Activity was quiet yesterday with the NSW banking holiday.
• Most TD flow was directed to the 9 month tenor where outright levels peak at 5.30%.
• To attract funding today, a green-friendly BBB+ ADI has come to market with +50 for 3-6 months NCDs.

China Deflation and U.S. Hawkish Sentiment Pre Inflation Print

• There was no significant data points for the market to trade off yesterday.
• Looking forward, China and U.S both have their inflation prints for the month of July.
• Economists are expecting a deflationary print of -0.3%. Additionally, their imports and exports are expected to fall later today.
• A slow down in China’s economic activity will serve as a global disinflationary force in the goods market.
• U.S. inflation is released on Thursday night, with markets expecting a MoM reading of 0.2%.
• Overnight, hawkish Fed speak by Bowman saw markets react and longer treasury yields sell off.
• A tight labour market continues to be a source of concern for the Fed.
• The inflation print will hopefully reveal the extent to which this may be feeding into prices.