- On Friday, A BBB bank was looking for funds in the market and offered 5.25% for 18 months to attract.
- NCD margins continue to be offered at +45 with +50 being offered occasionally to win funds.
- The ANZ 5 Yr Fixed bond that priced on Thursday has been trading in the secondary market slightly skinner, with a YTM of 4.92-4.98%.
U.S. Non-Farm Payrolls
- 187K jobs were added to the U.S. economy in August 2023, beating market expectations of 170K.
- This print marks the 3rd consecutive month of below 200K, indicating a gradual easing in labour conditions.
- The unemployment rose to 3.8% above market exceptions of 3.5% as there was a sharp rise in those entering the labour force.
- Wages has slowed slightly, with average hourly earnings increased by 0.2% MoM coming down from 0.4% in July.
- This print will be good news for the Fed in their challenge of pulling off a soft landing, reducing the chance of a Fed hike later this month.
The Week Ahead
- Tomorrow is Governor Lowe’s last RBA meeting before Michelle Bullock takes the reins.
- Markets are expecting a continued pause, with no stand out data to warrant a hike.
- With the cash rate being held at 4.10%, the notion that rates will stay elevated for longer and the cutting cycle starting later is gaining momentum.
- Domestic Q2 GDP is released on Wednesday. Economists are forecasting a print of 0.3%.
- This will give a clearer picture on how higher interest rates and inflation has been placing pressure on the economy.
- Consumer spending, Housing investment and business growth may be key data points for this print.
- In the U.S. ISM Services index comes out on Thursday night. The manufacturing index rose last week, it will be interesting to see if services follows suits.
- Finishing off the week there is China’s balance of trade & inflation data.
- Markets are forecasting inflation to continue to decelerate at a rate of 0.4%.