Daily Flows

• Market Participants held off any fixed income security trading until after RBA announcement to avoid event risk.
• That being said, the RBA announcement was in line with expectations and did not see large movements in the market.
• A Major bank continues to offer attractive term deposit rates across the curve. This has seen BBB names pricing higher in order to win funds.
• A term deposit rate of 5.25% for 1 year was offered.
• NCD margins are creeping up, as banks are showing +50 to get funds in the door.

Philip Lowe Holds Steady for His Final Meeting

• For his final meeting Governor Lowe did not finish with an unwarranted bang.
• The RBA board chose to hold rates steady for the 3rd month in a row with the cash rate paused at 4.10%.
• This pause did not come as a surprise to markets or economist, with all most all surveyed by Bloomberg forecasting a pause.
• The RBA continues to allow themselves flexibility extending the pause but giving a hawkish accompanying statement.
• This strategy will mean they can be more responsive if data starts to turn sour without the market being too caught off guard.
• It also ensures consumers confidence and spending remains restricted and avoids price setting behaviour.

Click here to watch a detailed analysis of the decision by David Flanagan (Head of Money Markets at Curve) on Ausbiz live.