Daily Flows

• Off the back of the FOMC minutes, reference rates opened 5 basis points higher for 1 year.
• Outright levels for term deposits may be expected to tick higher to levels of 5.25-5.30%.
• There is two-way flows in the NCD space but a bid tone remains. Most banks are opting to hold onto maturing NCDs given the TFF window and EOFY tightness that is expected.

FOMC Opts to Wait and See

• This morning the FOMC minutes were released and surprised markets with a more hawkish than expected tone.
• Members noted that “there was a lack of further progress toward the Committee’s 2% inflation objective”.
• Another point that markets picked up on was the fact that many participants noted they were questioning the current level of restrictiveness given the current conditions.
• There was also some expressing a “willingness to tighten policy further” if inflation risks arise.
• As most Central Banks are positioned right now, the Fed is waiting for the prevailing data to reveal a significant trend before any decisive action.