Daily Flows
- We saw continued demand in the A-2 space yesterday, with top-of-market term deposit offerings at 4.80% for 3–6 months and 4.50% for 1-year, drawing strong interest across the curve.
- +45 is now the clearing level for NCD funds, with mid-month inflows prompting increased competition among issuers to lock in funding at this mark.
- ADIs remain active in sourcing short-term liquidity, with pricing flexibility evident as banks position for upcoming holiday-related cash demands.
Markets Steady as Trade Deals Make No Progress
- Tariff uncertainty lingers as the US opened a national security review into pharmaceutical and semiconductor imports, raising fears of fresh tariffs. Trade negotiations with China remain stalled.
- Markets steadied overnight, with the US 10-year yield easing to 4.33%, while the Australian 10-year government bond followed suit, ticking down to 4.35%, reflecting a calmer session overall.
- The RBA Minutes reaffirmed two-sided inflation risks and a soft landing base case. But with April predating recent tariff shocks, May is shaping as a key decision point with some in the market calling for a 50bps cut of the cash rate.
- Today’s China Q1 GDP and US retail sales are in focus. Normally market-moving, but with data predating “Liberation Day,” markets are looking ahead to Q2–Q3 outcomes.
