Daily Flows & Insights – Markets React to Strong Economic Data in the U.S.

Daily Flows

  • Indications of a resilient U.S economy saw bond yields rise overseas and may see Aussie reference rates follow suit.
  • There is opportunity to purchase a floating Newcastle Greater Mutual bond maturing 10/02/2027 at an above market level today with offerings upwards of +125.
  • When considering risk and return and comparing asset classes, the opportunity to lock in upwards of 5.00% from an NCD product has high relative value.

Markets React to Strong Economic Data in the U.S.

  • In the U.S. the S&P Global manufacturing PMI rose from 50 to 50.9 over the last month, with services also lifting considerably.
  • This paired with initial jobless claims falling by 8,000 (down to 215,000) last week signals economic strength to the markets.
  • As has been the theme since restrictive monetary policy, good news was bad news. Heightened demand means inflation may take longer to subside and we may endure a longer period of higher interest rates.
  • The U.S. share market retraced after reaching recent records and U.S. treasury bond yields rose by 4 points in the 10 year and 6 basis points in the 4.94%.
  • Reaction in Australia is expected to be the same today after a considerable period of strength and stability.
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Curve Team
Jack Pedersen