Daily Flows

• Yesterday, AMP (A-2/BBB) 3 year floating bond was priced at 3mBBSW +165.
• With an outright initial coupon of 5.93%, market participants have been eager to pick up the issue in the secondary market.
• TDs remain elevated across the curve, with multiple names showing 5.65% for 1 year in the BBB space.
• NCD margins have continued to be offered at +50 for 3 months.

Powell Confirms market Expectations That the Job is Not Over

• Last night Fed Chairman Powell had a Testimony in front of congressional lawmakers.
• Powell noted that the economy and labour market is strong and that inflation is moving down gradually.
• With the June pause behind markets, he made it clear that the job is not over, implying more rate hikes to come.

UK Inflation Remains Sticky

• Yesterday, UK inflation came in higher than expected, at 8.7% YoY, 0.3% higher than market forecasts.
• One point of concern in the right in core inflation, a metric that excludes volatile inputs such as food and fuel.
• This rose by 0.8% MoM to 7.1% YoY which is the highest level since 1992.
• The stickiness of inflation that is presenting itself in the U.K. may ring alarm bells for Central Banks globally.
• The Bank of England will have to remain resolute on their restrictive policy as they try to return inflation to 2.0%.