Daily Flows & Insights – RBA Quarterly Update Makes For Interesting Reading

Daily Flows

  • Last Friday, considerable flow was directed to the ‘A’ rated space, with short term deposit offerings of 4.60%.
  • Even with a flattening curve, market Participants are still being compensated for locking in longer term.
  • Some investors were able to secure just under 5% for 2 year term deposits in the BBB space.
  • Today, Bendigo Bank is launching 3 year fixed and floating medium term notes with initial price guidance of 3mBBSW +125-130 and S/Q ASW + 125-130 basis points.

RBA Quarterly Update Makes For Interesting Reading

  • The RBA only made minor tweaks to their forecasts in Friday’s SOMP with but not enough to materially change the outlook.
  • What was more interesting was the assumptions on which the forecasts were based on which we will take a deeper look at in our Monthly Insights later this week.
  • While further RBA tightening from here remains data dependant, it seems only sticky inflation driven but the services sector will see any further action.
  • It means that the next likely timing for a move will be in August following the full Q2 inflation data that is due the last week of July.
  • For now, the market doesn’t have any further tightening priced in with a cut now full priced in for December which appears a bit ambitious at this point in time.


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Curve Team
David Flanagan