Daily Flows
- The yield curve has remained relatively stable recently, with limited top-tier data to drive significant movements.
- Global trade uncertainty and the upcoming domestic election will most likely drive subdued flows.
- A bid tone remains in the TD and NCD space, with 4.75% for 6-month TD’s and 4.71% for 6-month NCDs still available from domestic banks.
Monthly CPI Softens, But Not Enough for April Cut
- Australia’s CPI rose by 2.4% y/y in February 2025, slightly down from 2.5% in January, indicating a mild softening in inflation after several steady months.
- The slowdown was led by moderating housing inflation and a sharp drop in electricity prices, largely due to government energy rebates.
- Looking ahead, CPI is expected to remain range-bound, with temporary electricity relief expected to fade and contribute less to disinflation.
- Underlying inflation, the RBA’s preferred measure, eased 10bps to 2.7%, but not enough to trigger a rate cut in April. Markets expect the RBA to hold steady next week, awaiting further evidence of easing pressures.
- A May rate cut is currently 60% priced in, contingent on Q1 inflation figures and a broader assessment of evolving U.S. tariff policy.
