Daily Flows

• Yesterday, flow was kept at the shorter end of the curve, with 5.15% for 3 month term deposit standing out above the rest.
• In the domestic credit market, BOQ (now A- rated) is trading with wide margins. For a senior Secured 5 year margins are upwards of +100 over 3mBBSW.
• Whilst reference rates have remained stable, this may change post CPI data at the end of the month where unexpected print could shift the yield curve.

Equities Markets Hit Record Highs

• Overnight, S&P 500 moved to record highs ahead of tonights pivotal U.S. CPI data.
• With Powell keeping his poker face, and not revealing too much to the market, the numbers tonight may provide a clearer narrative for markets to trade off.
• Ahead of this print, U.S. government bonds showed little worry, trading slightly lower in the 10 year and 2 year.
• If inflation comes in as expected it is likely the Fed will be encourage by this progress and the possibility of cutting rates in September continues to come stronger.