Daily Flows

• 5 year reference rates continue to remain near previous peaks. This represents an opportunity to pick up elevated long term fixed term deposits as we enter the declining interest rate cycle.
• Judo bank’s rate of 5.15% for a 6 month term deposits continues to attract significant flow.
• There is healthy two-way flows in the NCD market, with margins hovering around the +45 level from domestic banks.

Inflation Concerns Keeps Consumers Pessimistic

• Yesterday, Westpac-Melbourne Institute Consumer Sentiment index in Australia dropped 2.4% to 82.4 points in April 2024, marking second consecutive monthly decline.
• Index remains below 100 for over two years, longest since early-1990s recession, indicating prevalence of pessimism over optimism among consumers.
• Despite expectations of Reserve Bank of Australia to lower rates late this year, uncertainty persists due to robust jobs data and rising house prices; bank remains cautious about inflation outlook.
• NAB business confidence index rose to 1 in March 2024 from 0 in the previous month, yet remains below long-run average.
• Improvement in sentiment noted particularly in retail, construction, and transport sectors.
• Cost pressures ease slightly, reflected in labour and purchase cost growth, though retail price growth remains elevated; gradual progress expected in bringing inflation back to target.