Daily Flows & Insights – RBA Remains Cautious But Comfortable With Current Conditions

Daily Flows

  • Market participants willing to strike on bespoke opportunities are being rewarded, with a rate of 5.18% locked in for 2 years from an ‘A’ rated bank.
  • NCD margins continue to face downward pressure as the system is flush with liquidity.
  • Margins were at +45 for 3 months but seem to be settling as the week progresses.

RBA Remains Cautious But Comfortable With Current Monetary Policy

  • Yesterday’s RBA minutes did not have too many surprises and did not stray from the current monetary policy agenda.
  • On a global level economic growth is slowing as cost of living and tighter monetary policy weighs on consumers.
  • Tourism and student arrivals from China to Australia are recovering but have still not reached pre-pandemic levels.
  • China’s property market is deteriorating and the world is watching closely to see how potential defaults will unfold.
  • Domestically, core inflation is remaining sticky due to demand and labour costs.
  • However, the data did not warrant any change from current monetary policy conditions.
  • It seems the RBA is happy to continue pausing with a hawkish tone to keep markets from price setting behaviour.
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Curve Team
Jack Pedersen