Daily Flows & Insights – Longer Term Yields and The Week Ahead

Daily Flows

  • Last week, market participants jumped on NSW Treasury Corporation 3mBBSW +19 26/05/2028 bond offerings. Although this particular opportunity may now be dwindling, similar offerings are still accessible in the market.
  • With longer reference rates rising due to shifting expectations of future interest rates, market participants promptly capitalised on any 3-5 year term deposit offerings surpassing 5.00%. While these rates have already moderated, bespoke offerings are still within reach for those who act swiftly.
  • NCD margins are currently at +45 with a slight bid tone prevailing in the market. As the end of the month approaches, there might be an uptick in demand for funds as banks seek to fulfil liquidity targets.

Longer Term Yields and The Week Ahead

  • As mentioned last week, the window for securing longer-term term deposits above 5.00% is closing, as yields have retreated both locally and in Australia.
  • Although the market adjusted interest rate cut expectations, the influx of money at these elevated levels, particularly from portfolio managers, has caused yields to retract once more.
  • The 5-year swap rate has decreased to 4.00% after reaching a peak of 4.13% last week.
  • This week is relatively quiet. Domestically, we have data releases on consumer confidence and the Monthly CPI indicator. In the U.S., attention will be on the final GDP print for Q4 and the PCE Price Index for February.
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Curve Team
Jack Pedersen