Daily Flows

• The start of the quarter has seen increased NCD activity, with market participants favouring longer durations and issuers offering 6-month NCDs.
• There is strong trading of Semi-Government floaters across the maturity profile.
• Term deposit activity is concentrated around 4-5 banks that consistently offer competitive rates on a daily basis. Bespoke opportunities have been quickly snapped up by investors with funds on the sidelines.

 Risk-Off Sentiment Continues & ISM

• Markets remain on edge amid growing uncertainty over the conflict in the Middle East.
• Biden’s comments suggesting Iran’s oil fields could be a target of Israeli retaliation saw spikes in oil prices and a surge in the USD.
• In the US, the ISM Services Index climbed 3.4 points, marking its highest level since February last year.
• This data prompted former NY Fed President William Dudley to shift from his hard landing outlook, now believing the Fed can control inflation without a significant downturn, calling for a terminal rate of 3.5%.