Daily Flows

• The Newcastle Greater Mutual 5 year MTN launched yesterday, attracting an orderbook of almost $1.5 billion for a final deal size of $500m with price set at +185.
• ADIs continue to seek funds from non-bank investors this week, willing to pay healthy rates to diversify their funding base – particularly at the 6 and 12 month mark.
• Unrated names have needed to show 5.20% at these tenors to compete with other banks, while those issuing NCDs are once more at +45 for domestic names.

Fed Speaks, But are Markets Listening?

• The US Fed rolled out a series of speakers yesterday to temper expectations of imminent rate cuts on the back of soaring market optimism.
• Cooling inflation has sparked investor confidence in rate cuts as soon as March, but the four Fed officials who spoke yesterday adopted a tone erring more on the side of caution than confidence.
• Interest rate markets appear to be maintaining the prevailing view that cuts will come sooner rather than later, with close to a full first cut priced in for May and cuts at every subsequent meeting until December.
• It is a quieter week ahead for local economic data, with Westpac’s consumer confidence print the next release due on Tuesday.