Daily Flows

• There was plenty of Interbank activity yesterday as healthy liquidity in the market sees market participants putting spare cash to use.
• Market Participants taking on foreign branch bank exposure are rewarded with margins of +50 for 3 month NCDs attainable.
• 5 year term deposits continue to offer the best outright levels, upwards of 5.50%.

Markets Remain Volatile

• US 10-year Treasury bond yields dropped nearly 20 basis points (bp) after briefly exceeding 5.0%.
• Oil prices decreased by over 2% due to intensified diplomatic efforts in the Middle East to manage the Israel-Hamas conflict, reducing concerns of supply disruptions.
• The US dollar also declined in response to these events.
• Equity markets had a mixed performance.

U.S. Not Currently In a Recession according to Chicago Fed Index

• In September 2023, the Chicago Fed National Activity Index (CFNAI) increased to +0.02, marking an improvement from the revised -0.22 in the previous month.
• This rise suggests that the US economy has grown at its average historical growth rate.
• The data suggests that the US economy is still a considerable distance away from a recession.
• Typically, the three-month moving average of the index needs to drop below -0.7 for the economy to contract, but it currently stands at 0.0.