Daily Flows
- In the NCD market, an easing in liquidity tightness has seen two way flows pick up.
- Although margins have subsided to +45 for 3 months from domestic names, there was plenty of activity in the 3 month term.
- With most BBB banks willing to match rates in order to attract, funds were placed across a diverse range of banks with levels of 5.60% for 6 months and 5.70% for 1 year.
Rate Hike Cycle Close To The End?
- In the U.S. equities markets have remained optimistic as we near the Fed’s interest rate decision.
- The composite flash July PMI softened from 53.2 to 52.0.
- Service activity fell by 2 points. New sales growth slowed as client spending decreased.
- The print signalled weak demand feeding into supply chains with reduced supplier delivery times & improved vendor performance.
- This slowing of economic activity has markets pondering whether this upcoming hike of 25 basis points may be job done for the Fed.
- PMI’s in Europe came in weaker than expected overnight. The July PMI fell to 48.9, 1 point lower than expected.
- Decline in new orders and other forward looking indicators pointed towards weaker economic activity for the 2nd half of 2023.
- It seems on a global level economic activity is slowing down, central banks are going to have make a decision as to how restrictive they want to take their monetary policy.