Daily Flows

• As month end closes in we saw an uptick in demand on Friday with a few NCD issuers looking to plug some gaps.
• While more broadly the BBB 3 month levels have been stable at +35, issuers with specific needs have been moving higher to secure funds as required.
• demand for term deposit funding is also ramping up with longer term rates such as 1 and 5 year moving back up above the key 5% level to 5.10% for the 1 year and 5.17% for the 5 year.
• There is also continued flows into fixed income products with ongoing primary issuers prompting additional transactions in the secondary market with semi FRN and Regional Bank FRNs both in demand last week

RBA’s Upcoming Melbourne Cup Meeting

• It is crunch week ahead of the RBA’s Melbourne Cup day meeting next week
• With the market tempering rate cut expectations in recent weeks, the quarterly CPI update this Wednesday will be crucial
• Currently the market is expecting headline inflation to ease back into the top end of the target band while underlying inflation is expected to remain well above the target range of 2-3%
• As we head into the meeting, the market expectation for rate cuts has eased from 4 to 3 with the first one now expected in May
• There will be some other interesting domestic data with import/export pricing, retail sales, building approval and credit data all out on Thursday