Daily Flows & Insights – Retail Sales Reflects Changing Consumer Behaviour

Daily Flows

  • Today, Heritage and Peoples Choice has launched a 3 year senior secured MTN with an initial price guidance of +165.
  • Yesterday, those venturing into the Unrated space were rewarded with 5.15% for a 6 month term deposit.
  • The NCD market remains stable, with +40/+45 remaining the going rate.

Retail Sales Reflects Changing Consumer Behaviour

  • Domestic retail sales came in at -2.7% for the Month of December. The market was expecting a negative print but not to this degree (expected -0.1%).
  • This negative print can be attributed to a shift in consumer behaviour, as Black Friday gains popularity, moving traditionally spending periods away from December towards November.
  • Looking at retail sales from September – December, consumer spending remains relatively weak and will serve as a sign to the RBA that demand side pressures are easing.

U.S. Economy Remains Resilient Ahead of FOMC

  • The U.S. economy is showing significant resilience in spit of tight financial and monetary conditions.
  • Although the Job Openings was a minimal change, it still indicates that the job market is holding steady.
  • Consumer confidence is the highest it has been since the end of 2021 and GDP growth came in much better than forecasted last week.
  • This positive data may have the Fed weary of an inflation flare-up but also signal that a ‘soft landing’ may be achievable.
  • Looking ahead, this may prompt the FOMC to deliver a hawkish speech tomorrow in an attempt to keep financial markets tight and price setting behaviour grounded.
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Curve Team
Jack Pedersen