Daily Flows & Insights – Markets Remain Volatile & U.S. Not Currently In a Recession according to Chicago Fed Index

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.
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Curve Team
Jack Pedersen