A sell off at the longer end of the yield curve has seen 1 year reference rates climbing 10 basis points and 5 year, 25 basis points.
ADIs will have to reprice their product offerings accordingly, which presents an opportunity to pick up term deposits close to 6.00% today.
NCD margins continue to reflect a bid tone in the market, with 3 month NCDs hovering at +50 with a few names showing +55.
Rates Higher for Longer
That was the message from global bond markets over the past 24 hours.
As the market continued to digest the minutes from the Fed’s recent meeting buyers appears to take a hiatus leaving yields to drift high.
The move that started during the US session the previous session gather pace throughout yesterday’s Asian session before kicking again overnight.
Data in the US did little to stop the momentum with a solid private employment report ahead of tonight’s non-farm payrolls and upside surprise from the US PMI both fuelling the move.
While the short end was largely unaffected, rates from 1 year and out climbed high with the 1 year up 10bp while the 5 year jumped close to 25bp.
The move leaves the curve much flatter and bring value back in to the long end of the curve with move reward for locking in longer dated maturities.
This value could stick around until we see a shift in narrative from central banks.