Daily Flows

• With liquidity tight in the market, participants have been able to secure 5.37% for 1-year Term Deposits from Unrated Banks.
• There is a strong bid tone in the NCD market, with +55 being the prevailing rate to retain funds.
• The GDP release did not significantly move interest rate reference rates; any uptick in levels has been primarily driven by higher demand.

GDP Delivers Slowest Expansion Since Q4 2020

• Yesterday, Q1 GDP growth rose by 0.1% QoQ, below the expectation of 0.2%. Year-on-year growth slowed to 1.1%, marking the slowest expansion since Q4 2020.
• With population growth at 2.5% YoY, contributing significantly to aggregate demand, GDP per capita continues to contract, falling by 0.4% QoQ.
• The increase in business inventories may indicate slowed demand as inventories build up.
• The minimal growth suggests to the RBA that demand and supply are balancing in the economy, however this is not significant enough to warrant a change to the current monetary policy outlook.