- 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.