Daily Flows & Insights – Inflation Concerns Keeps Consumers Pessimistic 

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.
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Curve Team
Jack Pedersen