Daily Flows

• Short term rates have been creeping up over the last couple of days, with BBSW looking like it will set 5 basis points higher across all terms and 1 Year Aussie swaps reaching a level of 4.20%.
• With credit spreads for 1 year term consistently being offered at +100, outright rates of 5.20% are expected today.
• NCD margins are being held at +50 for 3 months as ADIs keep coming to market looking to attract funds.

RBA Tomorrow

• This week, The RBA meets on Tuesday to make a decision on monetary policy.
• The market is split on whether or not the RBA will hike.
• Points for a hike are: a higher than expected monthly CPI, resilient house prices, Auction clearances increasing and a higher than expected wage decision.
• Market reasoning against a hike include: slowing retail sales, building approvals decline and lending data softening.

The Week Ahead

• Q1 GDP is released domestically with economists forecasting a rate of 0.3%. A softer than expected read is being called by some economists with weaker consumption and weaker contribution from net exports being the driving forces.
• In the U.S. important data points include U.S. ISM services, trade balance and consumer credit data.
• China’s inflation rate, PPI and trade balance is also released.