Daily Flows

• Yesterday market participants elected to lock in longer terms, with a standout rate of 5.25% for 4 years snapped up.
• This behaviour may be driven by today’s GDP pending print, with risks to the downside having the potential to see interest rate yields lower.
• NCD margins are creeping up as banks are looking to get funds in the door quickly. Levels of +55 for 3 months were traded yesterday.

JOLTS Sees Bond Market Rally

• Overnight, the number of job openings declined by 296,000 from the previous month to 8.059 million.
• This is the lowest level since February 2021, and came in significantly weaker than expected.
• Along with the ratio of jobs available for workers the data signals that the labour market may be cooling.
• This saw markets reconsider the ‘higher for longer narrative’ as wage pressures may ease and inflationary pressure cool. bonds rallied, with the U.S. 2-year Treasury yields falling by 5 basis points to 4.77% and Aussie Government 2 year dropping by 8 basis points to 3.98%.

Australia Braces For GDP Release

• Yesterday, Australian GDP partials were released for Q1. Company Gross Profits, and Current accounts came in lower than expected whilst business inventories rose by 1.3% (expected -0.9%).
• The pre-GDP partials saw most economists revise down slightly their GDP expectations and it is expected that there will be a deepening in per capita recession, driven primarily by the household sector.