Daily Flows

• Semi-government floaters continued to attract flows yesterday with longer TCV and WATC lines proving popular. Stock remains today in QTC, NSWTC, and TCV FRNs.
• Foreign A1/A branches issued 3 month NCDs at +50 yesterday, representing good value for investors looking to diversify investments.
• A number of ADIs were looking for funds yesterday, particularly in the A2 and A3 space, with rates of up to 5.20% available for 6 month deposits.

Easing Expectations Drive Falling US Dollar

• Australia’s trade surplus widened to $11.03b in February against $10.74b in January, with exports growing 1.6% and imports up 1.3%. This was still less than the $11.50b expected by economists.
• Despite falling short of projections, the Aussie dollar was up for the second consecutive session to 66.2 US cents on a falling US dollar, driven by Fed Chair Powell’s comments to Congress that they are “not far off” being confident enough to begin easing.
• US interest rate markets priced in a further 20% chance of a 5th cut this year as a result, with local Australian markets closing in on expectations of two full cuts by Christmas.
• US Non-Farm Payrolls are out tonight with expectations of a 200,000 increase in February. January’s print almost doubled expectations with a 333,000 increase on December, so it is still one to keep an eye on with surprises not out of the question.