Daily Flows & Insights – Presidential Debate Today Ahead of Inflation Debate Tomorrow

Daily Flows

  • We saw large term deposit flows yesterday with 12 month rates approaching 5.50% from a number of A1 banks.
  • Fewer ADIs are looking for funds on the last day of the financial year but we expect those that are to publish similarly attractive rates again today.
  • NCD margins have leapt back up to +60 over 3-6 month BBSW, with an outright level of 5.06% for 3 months and 5.37% for 6 months.

Presidential Debate Today Ahead of Inflation Debate Tomorrow

  • The US Core PCE Deflator, the Fed’s preferred inflation measure, will be released tonight, providing further clarity to US policymakers eager to see evidence that inflation is trending back towards their 2% annual target.
  • Economists expect no change in the MoM headline PCE price index and a rise of 2.6% YoY, while consensus estimates for core PCE are an 0.1% increase in May on April’s 0.2% rise.
  • Money markets are pricing in a November cut with a second cut in January 2025. Only 10% of one cut is priced in to July’s meeting. Meanwhile, in Australia, markets have now priced a tightening bias for all of the next 5 meetings after Wednesday’s hot inflation data.
  • The first US presidential debate will be closely watched from 11am AEST today as markets look for more certainty on the identity of the 47th US President.
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Curve Team
Josiah Binet