Daily Flows
- 12 month deposits continue to be the flavour of the week, with several banks paying above 5.30% for 1 year TDs.
- A number of A2 NCD issuers have been on the bid this week heading in to end of month, with 6 month outright levels approaching 5.20%.
- A Westpac 5 year fixed line proved popular yesterday with investors able to pick up the 5.10% coupon bond at par – an exceptional rate for a major bank.
Fewer Building Approvals Add to Supply Concerns, US Inflation Data Out Tonight
- Housing approvals fell in April on expectations of a 1.8% rise, with an 0.3% decline MoM.
- While this dataset is a historically volatile one, the addition of just 13,000 new homes will add to concerns about housing affordability just weeks out from the beginning of the government’s National Housing Accord – which aims to build 20,000 new homes a month.
- All eyes will be on tonight’s Core PCE Deflator, with economists tipping a slight pullback to an 0.2% increase MoM on a prior print of 0.3% from February to March.
- This particular inflation metric is a closely-watched one and can spark money market volatility on the back of surprise readings. Markets are currently pricing in a first full Fed cut in December, but this timeline could change on a dime after the data release at 10:30pm tonight.