Daily Flows & Insights – Oil Prices Hitting New Highs for 2023

Daily Flows

  • Macquarie’s recent issuance is trading at 10 points wider than similar major bank securities.
  • For ADI’s this is a 10 basis point pick up in return for the same risk weight application.
  • A term deposit rate of 5.20% for 2 years gathered significant flow sitting above market in the BBB space.
  • It represents a chance to lock in a ‘high’ yield. Longer term interest rates have significant downward pressure as markets take into account economic slowdown and an easing of interest rates.

Oil Prices Hitting New Highs for 2023

  • Markets have been quiet as investors wait for the FOMC meeting later this week.
  • Brent crude is near a 10-month high due to ongoing supply constraints.
  • Saudi Arabian Energy Minister expressed uncertainty about Chinese demand.
  • OPEC have maintained their unilateral production cut with a focus on stabilising oil markets and global security.
  • This intention was contextually vague however, with no price range stated at all.
  • Declining Russian exports and stronger China exports continue to contribute to market tightness.
  • Changes in oil prices can have a direct/indirect impact on inflation as it feeds into expectations, Central bank outlook and global dynamics.
  • It will be an area of concern for Central Bank’s globally and be taken into consideration for future monetary policy decision.
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Curve Team
Jack Pedersen