Daily Flows

• Standout levels are being offered in the 2-year term deposit, with 4.70% achievable.
• At the shorter end of the curve, 4.71% was locked in for a 2-month term deposit.
• The 6-month term remains the outright highest level, with 5.15% available from an ‘A’-rated bank.

RBA Speaker: Long-Term Inflation Remains Well Anchored

• It has been quiet, with markets awaiting crucial employment data in Australia and retail sales in the U.S.
• RBA speaker Sarah Hunter addressed inflation expectations, emphasising their importance in guiding households and businesses, contributing to a healthy economy.
• When expectations become de-anchored, inflation volatility rises, creating uncertainty and disrupting economic decision-making.
• Inflation expectations influence long-term interest rates, portfolio allocations, and asset prices, all of which impact financial markets.
• Despite high inflation, short-term expectations have been gradually aligning with long-term expectations, which have remained anchored.
• Inflation expectations are crucial for the RBA in achieving its three-pronged mandate: monetary stability, full employment, and economic prosperity.