Daily Flows

• A foreign A1/A name has been paying 5.19% for 6 month term deposits this week, attracting significant flows from investors.
• Market rate for domestic A2 issuers is +45 this week for 3 month NCDs, with a number of ADIs coming to market.
• We saw further flows in fixed and floating-rate semis yesterday, with WATC continuing to be a popular issuer for both.

Gloomy GDP Growth As Population Props Up Print

• GDP printed as expected yesterday with growth of 0.2% from the September quarter and 1.5% from Q4 last year, the latter among the lowest annual growth rates since the turn of the century.
• For just the third time in the last four decades, the data indicated that Australian economy shrunk over the calendar year when excluding the impact of population growth.
• On a quarterly basis, the 0.2% growth was bolstered by an 0.6% increase in net exports, which was less a boost in exports and more due to imports falling 3.4% QoQ.
• Looking forward, the RBA expects annual GDP growth to fall as low as 1.3% in the June quarter before picking back up towards the 2% recent short-run average by the end of 2024.