- 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%.