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.