Daily Flows
- Term deposit rates at the shorter end have eased following the RBA rate cut, though the hawkish tone led to 3-5 year rates climbing.
- Investors are taking advantage of the longer-term opportunities, locking in 5.15% for 5 years.
- With mid-month inflows, the NCD market remains balanced, showing two-way flows at 3 months +40 in the domestic space.
Labour Market Continues to Show Resilience
- Australia’s unemployment rate edged up to 4.1% in January 2025, slightly higher than December’s 4.0%, and in line with market expectations.
- The number of unemployed people rose by 23.4K, with part-time unemployment increasing by 12.4K, signalling softness in part-time roles.
- Strong labour market engagement was evident in the participation rate, which reached a record high of 67.3%, demonstrating robust workforce involvement.
- The RBA expects the labour market to remain tight, forecasting an unemployment rate of 4.2% until June 2027.
- The RBA aims to achieve a delicate balance, attempting to reduce inflation while maintaining employment gains.
- Considering current inflation trends and the recent rate cut it seems like a RBA may be on their way to achieving this.