Daily Flows
- The standout A1/A 6 month term deposit rate of 5.21% continued to attract inflows yesterday, with rates in a similar place again today.
- 12 month rates have dropped slightly since last week but opportunities remain in the A2 space with banks willing to pay up to attract funds.
- We saw continued interest in semi-govt FRNS, with stock from most issuers continuing to remain available this week. NSWTC & TCV have been issuers of choice this week.
Sell-Off Continues as Markets Switch Sides
- The sell-off in yields continued again overnight with US 10 year yields up another four basis points to 4.35%, touching 4.40% for the session.
- With yields rallying to 4.05% as recently as three weeks ago, Fed Chair Powell’s continued assurances that the central bank is in no rush to cut rates seem to finally be having an effect on a market that has turned bearish after persistently dovish bets.
- Interest rate markets are now pricing in less than three cuts before the end of the year, down from the six cuts priced in January.
- The Melbourne Institute’s monthly inflation gauge reported an 0.1% MoM gain in March, with annualised inflation down slightly to 3.8% from 4.0% in February.
- Monthly job advertisements fell further on February’s levels, down 1.0% in March in the ANZ-Indeed survey.
- Both pieces of data point to the impact of the RBA’s hiking cycle being felt across business and households, with Friday’s business and consumer confidence prints worth watching for an indicator of sentiment.