Daily Flows

• Two ‘A’ rated banks are showing attractive term deposit rates at the longer end of the curve. The term deposits are 22 basis points higher than Major Bank Senior Unsecured paper.
• There has been two way flows in the NCD space all week, with domestic and branch banks keen to take on funds.
• Today NAB has launched a floating/fixed senior unsecured 5 year MTN with a guidance of 3m BBSW +95.

New Data Makes for Investing FOMC Meeting Next Week

• American producer prices increased by 0.6% in February, coming in well over the expected 0.3%.
• US retail sales in February increased by 0.6% month-over-month (m/m), rebounding from a downwardly revised -1.1% in January but was below market expectation of 0.8%.
• Whilst retail sales does signal cooling demand in the economy, the PPI print indicates inflationary pressure are still present.
• The Federal Reserve’s upcoming meeting prompts speculation on whether they will consider cutting rates in June or focus on messaging to deter price setting behaviour from the market.
• Expectations for the Fed’s decision next week could lead to market disruption, potentially resulting in higher yields, a stronger USD, and volatility in equity valuations.