Daily Flows
- The demand for funds has surged as banks seek to bridge funding gaps before the end of the month.
- Levels of 5.50% for a 12-month period are available to those who act promptly.
- NCD margins have risen to +55 for 3 months as banks find themselves in competition to secure funds.
Monthly Inflation Indicator Cools
- The Consumer Price Index (CPI) in Australia increased by 4.9% in the year to October 2023, marking a decline from September’s 5.6% and falling below the forecasted 5.2%.
- The monthly CPI indicator, excluding volatile items and travel, experienced a 5.1% increase in October, down from the 5.5% rise in September.
- Larger-than-expected drops were observed in numerous categories, rather than a broad-based slowdown.
- Australia’s record migration intake has maintained a tight labor market and strong aggregate demand.
- It is noteworthy that this monthly indicator is more skewed towards the goods sector, not fully capturing the persistent inflation in services that is causing concerns for the RBA.
- Markets now only price in a 5% chance of a rate hike at the RBA’s upcoming meeting on December 5, down from 10% after the recent inflation data.