Daily Flows

• Ahead of tomorrow’s CPI release, flows have been mixed this week with a barbell approach implemented. Market participants are rolling term deposits for short-term liquidity at 5.05% and locking in longer durations where possible, upwards of 5.33% for one year.
• The standout level in the NCD space is +50 for 3 months from an A-1/A rated Foreign Branch Bank.
• Currently, the 6-month BBSW is the peak term across the yield curve. A significant CPI print could potentially shift the interest rate outlook and rejig the yield curve.

Quiet Start for a Busy Week Ahead

• It has been a quiet start in Australia and overseas as markets hold their breath for upcoming Central Bank meetings and inflation data.
• U.S. and UK central banks are largely expected to hold rates but deliver a dovish outlook as the economic data continues to support a relief in monetary policy.
• In Australia, the outlook is more uncertain with an important Q2 inflation print expected tomorrow.
• As of this morning, markets are pricing a 24% chance of a 25 bps hike by the RBA next Tuesday.