9 January, 2025

Daily Flows

• There has been a flurry of primary issuances, with CBA, OCBC, and Newcastle Greater all issuing senior debt.
• The standout NCD rate yesterday was 4.91% outright for 9 months, offered by a couple of issuers.
• In the term deposit space, 5.10% for 6 months continues to lead the pack, with the next closest offering at 5.05% for the same term.

Energy Rebates Unwind in Recent CPI Indicator

• Yesterday, Australia’s monthly CPI climbed to 2.3% year-on-year in November, 0.1% higher than expectations.
• The trimmed mean CPI fell to 3.2%, reflecting an easing in underlying inflationary pressures.
• One factor contributing to the increase in headline CPI was the run-off of government electricity rebates.
• Despite progress in cooling inflation, the RBA may face challenges in cutting rates in February 2025 due to persistent inflationary pressures, a weak Australian dollar, and potential tariffs.
• The RBA’s three-pronged mandate continues to prioritise long-term inflation stability over immediate rate cuts, with full employment and GDP growth supported by immigration and public spending—albeit on fragile foundations.