Daily Flows & Insights – DECB Follows Canada’s Tune and Cuts Rates

Daily Flows

  • There was heavy two-way flow in the market, with banks keen on funding and market participants eager to place funds.
  • Banks offering 5.25% for 6-month terms and 5.30% for 12-month terms attracted most of the term deposit flow.
  • In the NCD space, a bid tone remains, with a level of +55 for 3 months holding steady all week.

ECB Follows Canada’s Tune and Cuts Rates

  • Both Canada and the ECB have now cut rates, signalling a new global phase as central banks reconsider their monetary policy outlooks.
  • The ECB was cautious with the rate cut, stating they will focus heavily on inflation and wage growth before considering further cuts.
  • They cited moderation in prevailing data as the reason for the decision but made it clear that the next step is still data-dependent.
  • Besides Japan, Australia is one of the few major countries still considering a rate hike.
  • The path for Australia is indeed very narrow, as GDP reaches a stall point while inflation continues to surprise slightly on the upside.
  • The next quarterly inflation print will be crucial for the domestic monetary policy outlook.
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Curve Team
Jack Pedersen