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.