An A-1 rated foreign branch bank’s short-term deposit rates stand out in a highly volatile rate environment. Notably the 3-month term offering is offering 5.00%.
Minimal movement in the two-way NCD market, with most foreign branch banks offering a +50 margin and domestic banks maintaining a +40 margin for 3 and 6 month terms.
Significant activity in the secondary bond market, with large movements in the 4-year Semi-Government floating bond segment where Curve executed several deals.
FED Minutes Suggest Plausible Grounds for 0.25% Rate Cut on the Horizon
A 0.25% rate cut appears imminent, with several Fed officials acknowledging a “plausible cause” for the reduction during their July meeting. Despite holding rates steady, the discussion suggests growing support for easing monetary policy soon.
Concerns about payroll accuracy and labour market risks discussed in the meeting have contributed to a 40% probability of a 0.5% rate cut in September, reflecting a more dovish outlook.
Equities continue to rebound from the uncertainty following the Nikkei 225 crash three weeks ago, with the S&P 500 rising 0.44%, contributing to a weekly gain of 3.05%.
The Aussie Dollar continued to strengthen against the US Dollar, contributing to a weekly gain of 2.31%, as markets anticipate a US rate cut next month.