Term deposit flow continues to be directed to elevated areas of the yield curve. with 6M BBSW at 4.11% and 1 Year Swaps at 4.01%, outright levels of 5.10% continue to be offered.
Bond activity in the secondary market has picked up. Market participants have been able to pick up Feb 2026 A+ floating rate notes with a trading margin of 3M BBSW +88.
Today, a BBB+ ADI has come to market offering +55 for 6 month NCD funds. Those looking to take advantage will need to be quick to act as it is a limited offer.
Debt Ceiling Talks Resume as Fed Presidents Remain Divided.
Market continue to hang of the headlines related to the debt ceiling negotiations while we also saw more plenty more Fed comments ahead of the June meeting.
Talks resumed over the debt ceiling, giving more hope that a deal will be done with house speaker McCarthy saying there should be no fear of a US default when questions on the prospect of deal being done.
Meanwhile Fed Voting Member Neel Kashkari said it was a “close call” when it came to voting for another rate hike at the next meeting.
Others were more pointed on their view with the Fed’s Raphael Bostic said he preferred a pause highlighting the lag in which monetary policy works while James Bullard said at least two more 25bp hikes were warranted.
It makes for an interesting meeting in a little over three weeks time.