We saw plenty of activity in major bank paper yesterday with investor preference for 3-5 year fixed lines.
An A2/BBB+ issuer is setting the pace in the NCD market this morning, offering +60 over 3 month BBSW.
ADIs continue to adopt a bid tone in the term deposit space, with multiple A2 banks above 5.30% for 12 months yesterday.
Fed Sees Fewer Cuts This Year Despite Cooler Inflation
US inflation cooled in May, with MoM flat at 0.0% and core inflation creeping up by 0.2% on expectations of an 0.3% rise.
Hours later, the Fed held rates steady in the 5.25-5.50% range for the 7th consecutive meeting.
Fed officials’ interest rate forecast now implies just one cut by the end of the year, two fewer cuts than the March estimate – which had 10 of 19 dots implying a minimum of three cuts this year.
The latest dot plots has eight projecting two cuts, seven with one, and four with no cuts – leaving zero still backing three cuts.
The US 5 and 10 year plunged 15bps in the immediate aftermath of the inflation data but regained some ground in later trading to finish the day down 10bps.
Domestically, Australian employment data is due out at 11:30 today with economists tipping a slight improvement in the unemployment rate from 4.1% to 4.0%.