Daily Flows

• Yesterday, QTC launched a 4.25 year floating bond with price setting at 3mBBSW +40 and a total size of $2 Billion.
• Those looking to complement this exposure with higher margin have been biding for Newcastle Jan 2030 at approx. +108.
• With monetary policy expected to ease soon, market participants are also favouring Rabo’s (A-1/A) 5 year TD for at 4.95%.

Retail Sales Fall But Overall Conditions have Improved

• Australian retail sales slipped by 0.1% m/m in December 2024, marking the first decline in nine months. However, the drop was smaller than the anticipated -0.7%, strengthening market confidence in a near-term RBA rate cut.
• Retail volumes recorded a 1.0% q/q increase in Q4 2024, following a 0.5% rise in Q3, indicating some resilience in spending despite weaker nominal sales in December.
• Total nominal retail spending ended 2024 up 2.4%, with H2 showing a 2.2% gain over H1. However, uncertainty lingers over whether this improvement signals a lasting trend or is largely the result of seasonal discounting.
• With inflation cooling and consumer spending still under pressure, the data may be perceived as fire power for a rate cut in February by the RBA.