Daily Flows

• With markets sensing a pivotal moment, term deposit placement has been concentrated at the longer end of the curve.
• Market participants are favouring duration, with interest rates expected to fall, increasing the relative value of these longer holdings.
• A slight bid tone is returning to the NCD market, with offerings for domestic funds sitting on the sideline.

How Quickly the Tune Changes

• Bond markets continue their rally as central banks and economic data continue to support a lower interest rate environment.
• The Bank of England narrowly voted to lower its policy rate, stressing that policy will still need to remain restrictive for a long time.
• In the U.S., weak manufacturing data and high jobless claims fuelled a further rally, with the U.S. 2-year Treasury falling to 4.15%.
• Australia followed suit, with 3-year bond futures dropping to 3.60% and markets pricing a 50% chance of a rate cut in November.