Daily Flows
- Large flows continue in TCV floater trading across the 2027–2029 lines.
- ‘A’-rated banks are still offering top rates for longer terms, with 5.25% available for a 5-year term deposit.
- There is some demand today, with banks offering +40 for 3-month NCDs to address funding gaps.
RBA Minutes Show Concern Over Rate of Disinflation
- The RBA minutes revealed the primary concerns keeping the central bank on edge.
- In particular, uncertainty persists around economic growth and the current level of monetary policy restriction.
- The focus has shifted from the labour market towards the rate of disinflation.
- A line that caught the market’s attention was: “Need to observe more than one good quarterly inflation outcome to be confident that such a decline in inflation was sustainable.”
- Given the recent trimmed mean quarterly inflation print of 0.8%, this could suggest that several larger quarterly declines may be required to build the RBA’s confidence.
- Taking this into account, most economists are still forecasting a February rate cut, though less than half of the market is pricing this in.
