- Monday 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.