Daily Flows & Insights – Domestic Inflation Today

Daily Flows

  • ┬áMonday saw reduced flows ahead of ANZAC day with most working on limited staff.
  • Most flow was directed to short term roll overs. That being said there were some investors that chased tenor, locking in close to 5% for 1 year term deposit.
  • Todays domestic inflation data will be watched closely be markets. The prevailing data will be crucial to the direction of RBAs future monetary policy decisions.

Domestic Quarterly Inflation

  • Today, quarterly inflation data is released at 11:30am AEST.
  • RBAs latest SOMP has a forecasted rate of 7.27% based of the June 2023 expectations, while the market is currently pricing in a quarterly rate of 6.9%, and a 6.5% rate for March.
  • Currently the market is pricing in a 25% chance of an interest rate hike in May, and an 80% chance in August.
  • If the print comes in softer than expected, we will see further market confirmation of no more rate hikes being priced into the market, which currently sits at 25% chance of a hike in May, and an 80% chance of a hike in August.
  • After the news, it will be important for investors to consider the terms of their investments as the shape of the yield curve may shift.
Share this entry
Curve Team
Joshua Haddon