Daily Flows

• Yesterday, flows were subdued. Those who did invest in funds opted for longer terms, locking in a 5.70% rate for 5 years from an ‘A’-rated counterparty.
• In the NCD space, the flow was directed towards the 6-month tenor, with outright levels offering rates upwards of 5.20%.
• Market participants looking for environmentally friendly banks have been able to secure term deposit rates of 5.40% for 12 months.

RBA Today

• Today, 29 out of 32 economists surveyed by Bloomberg expect the RBA to raise the overnight cash rate to 4.35%.
• There is some discord between market speculators and the surveyed economists, with futures pricing in a 30% chance that the RBA will keep rates on hold.
• The hotter-than-expected Q3 inflation result has been the primary driver behind most economists’ calls for a rate hike.
• Retail sales showed a 0.9% month-on-month increase for September, marking the strongest monthly performance this year.
• The labor market experienced a slight cooling with a 0.1% decrease in unemployment. This change was nuanced, with a shift toward part-time employment and a lower participation rate.
• With the Statement on Monetary Policy (SOMP) also released on Friday, market participants may expect slight adjustments to the RBA’s economic outlook, including updates to figures related to population growth and inflation.