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.