Daily Flows

• It was another bumper day of flows with ADI’s negotiating rates to defend maturities against those ADI’s looking to raise new funds follow the black Friday/Cyber Monday sales and ahead of the holiday slowdown.
• NCD margins remained elevated with a number of issuers coming forward to replace those that got their fill earlier in the week.
• Despite the fall in BBSW and Swaps following the national account on Wednesday, TD levels remained largely unchanged with rate north of 5% still available out to 12 months
• These dynamics are likely to persist into next week before a better balance between supply and demand emerges.

Quiet End to the Week

• Things can move quickly in markets, as expectations for future outcomes, such as the direction of monetary policy.
• Two weeks ago, rate cut expectations had almost been extinguished with only 1 rate cut fully priced in and it wasn’t expected until the second half of 2025
• Fast forward to today and things look markedly different with almost three rate cuts priced in, the first kicking off in May next year.
• It is somewhat at odds with the RBA’s persistent rhetoric persistent on inflation so toning that time any time soon seems unlikely.
• More broadly it was a quiet night with markets largely marking time ahead of the non-farm payrolls release tonight in the US.