Daily flows

• Yesterday, the 3yr Westpac FRN and FXD priced at a discount margin of +75 and 4.82%.
• The issuance had over $4.25Billion. After price guidance tightened & allocation a total of $2.25Bill was printed.
• If cash flow permits, TDs for the same tenor are pricing at 5.25% from Regional Banks.
• NCD markets remain stable with +45 for 3 months the level traded at this week.

Balance of Trade

• For the month of June, Australia recorded a trade surplus of $11.321 Billion.
• However, imports fell by 4% relative to exports falling by 2% which kept a surplus figure.
• Drop in imports was driven by consumption goods which fell by 12%.
• If this trend continues it could be an indication of aggregate demand slowing.
• Stickiness in services inflation continues to persist, with services imports increasing by 2.4%, driven by transport and tourism related services.
• Although an often volatile data point, in unison with other economic indicators such as retail sales and inflation it signals to the RBA that monetary policy is doing its job curbing demand.

Retail Sales

• This is also reflected when looking at retail sales.
• In real terms, QoQ retail turn over was -0.5%. This is following on from -0.8%, -0.4% and 0.3% (-1.4 YoY).
• The 12 interest rate hikes are putting a strain on consumer spending, reflected in the most consistent contraction since the GFC.
• Both these data points support the RBAs most recent interest rate decision.