Daily Flows

• In pursuit of monthly funding targets domestic banks have been offering 5.15% for 3 months and 5.50% for 12 months.
• Those holding funds on the sidelines will have the opportunity to acquire above market levels today.
• For new funds, a margin of +50 or higher is required for Domestic NCDs.

Retail Sales, A Calm Before Black Friday?

• In October 2023, Australian retail turnover decreased by 0.2% MoM (market expectations were +0.2%) after two consecutive months of positive trends.
• This seasonal decline has become more pronounced over the years as the popularity of Black Friday November Sales has increased.
• Sales were lower across most categories, and a pickup in discretionary spending is anticipated in November.
• Real-time private banking data over the coming week will offer insights into Black Friday turnover.
• The print is not significant enough to warrant concern from the RBA and does not alter the trajectory of the current monetary policy.

Dovish Fed Speak Fuels Treasury Rally

• In the U.S., Governor Waller, typically a hawkish speaker, suggested the possibility of a pause in interest rate hikes in December, leading to a significant extension of the November Treasuries rally.
• Speculation about a dovish Fed stance prompted declines in the dollar and a modest rise in stocks. The Swaps market anticipates over 100 basis points of cuts by the end of 2024.
• U.S. consumer confidence has risen for the first time in four months. Additionally, home prices have reached a record high, and Fed officials have commented on an encouraging inflation slowdown.
• There now appears to be significant dissonance between the U.S. and Australian monetary policy outlooks. While both seem to have reached the peak of inflation, the progression of U.S. inflation downwards is quicker, and the Australian scenario is still up in the air.