- In the TD space, market participants are spoilt for choice. Those that are quick to act have been able to pickup bespoke offerings upwards for 5.10% for 1 year term deposits.
- In the A rated space, attractive levels of 4.60% for 3 months and 4.90% for 1 year are being offered.
- With a strong bid tone in the market, +45 for 3 months is the going rate to retain funds.
Divided House, Divided FOMC
- As the debt ceiling negotiations continue, the Fed FOMC Meeting Minutes from May 2nd were released this morning.
- The minutes revealed significant division amongst the members on whether further hikes are necessary.
- Those in favour of more hikes were concerned that inflation was not falling fast enough.
- The two main factors driving a opposing pause sentiment were the lag of monetary policy and the tighter credit conditions.
- It was made clear that future interest rate decisions will depend greatly on the incoming data over coming weeks.
- At the time of writing, markets are pricing in a 30% chance of a hike in June.
RBNZ Hikes By 25bp
- The RBNZ hiked another 25bp yesterday taking the cash rate to 5.50% as was expected.
- Unexpectedly, the decision between hiking and a pause was split 5-2.
- In another further surprise, the RBNZ indicated that the cash rate is likely at the top for this cycle.