Daily Flows
- Today, we have seen flow to Semi Government FRNs QTC 2030 and TCV 2031, with volume still available.
- With longer reference rates tracking down slowly, market participants should expect TD rates to come down, with 1 year dropping to 5.30%
- The domestic NCD market has cooled considerably with +50 for 3 months disappearing for now.
Retail Sales Stronger Than Expected Data Fails to Deter Markets
- Retail sales came in stronger than markets were expecting with a flat reading of 0.0%.
- Interestingly, ‘control’ sales, a component of GDP rose by 0.9%, its largest increase since April 2023.
- Overall this component is close to pre-pandemic levels and indicates consumer demand is returning to non-inflationary levels.
- The Upside result did not move market sentiment surrounding the U.S. monetary policy outlook.
- Bond yields tracked slightly lower and equities continued to rally in the U.S.
- Looking ahead, tomorrow’s employment data will be watching closely by the domestic market.
- Whilst market pricing for an August hike has cooled, data that indicates a tight labour market may change this outlook.
