Daily Flows

• There was solid flow to longer term deposits with offerings from 5.40% for 4 to 5 years from an A-1/A bank.
• We are seeing two way flow in the NCD market with a bank offering +60 for 3 months to attract.
• With the monetary policy outlook unclear over the next 6 months, most market participants are utilising a balanced approach, taking advantage of short term liquidity but also terming out and making the most of curve steepness where possible.

Powells Positive Vibe Moves Markets

• Gathered with other key central bank figures at the ECB forum, Fed Chairman Jerome Powell noted the U.S. is back on a “disinflationary path”.
• As always, the Chairman was keen to balance his message, stating that more evidence is needed before cutting rates.
• Whilst Powell sent a balanced message, markets latched onto the dovish sentiment, rallying as they consider the softer outlook for monetary conditions.
• Markets now see a 71% chance of a rate cut in September, rising from 65% post disinflationary comments.
• Australia finds itself is quite a different position. Although the picture is not entirely clear, monthly inflation indicator suggests that our battle against inflation may require more action.