Daily Flows

• Over the Christmas period, there was significantly less activity, with most banks having already filled their liquidity in anticipation of the quieter season.
• A few banks were chasing flows, offering NCDs at +50, which attracted any available liquidity in their direction.
• AMP’s discretionary rates have ceased but may return to the market on Monday.

Quiet Start to The New Year

• The holiday period has resulted in low trading volumes and minimal Tier 1 data for markets to analyse.
• The Australian dollar has weakened recently, primarily due to Cube’s Currency experiencing a sharp decline. In the longer term, the strength of the US dollar is also likely to exert downward pressure on our currency.
• To start the year, the 1-year quarterly Australian Swap rate is at 4.00%. Interestingly, this is close to last year’s opening level of 4.13%, with a high of 4.51% and a low of 3.92%.
• With three rate cuts priced in by market participants for this calendar year, it wouldn’t be surprising to see further downward pressure on the current level.