Daily Flows & Insights – Slowing Economy Speeds Up Expectations

Daily Flows

  • An A2/BBB+ bank was paying 5.15% for 12 month deposits yesterday, with investors able to pick up 5.10% for 6 months.
  • A1/A names continue to pay 5 year rates north of 5% for market participants looking to extend duration.
  • Domestic NCD margins remain at +45 today for those A2 banks looking for funds.


Slowing Economy Speeds Up Expectations

  • A series of non-major data prints released yesterday all painted the same picture: the RBA’s 13 interest rate hikes between April 2022 and November 2023 are finally having their intended effect.
  • First cab off the rank was the Westpac-Melbourne Institute’s monthly inflation gauge, which showed an 0.1% decline from January levels for just the second monthly decline in 18 months. Annual inflation was 4%, down from 4.6% in the year to January.
  • HR managers had a quieter February as job advertisements declined 2.8% in ANZ-Indeed’s monthly index, 12.2% lower on an annualised basis.
  • To top off yesterday’s data, building approvals for January printed at -1% on expectations of a 4% increase.
  • Interest rate markets responded with a slight increase in expected rate cuts this year, edging closer to a full two cuts by December with an implied overnight rate of 3.94% after December’s meeting.
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Curve Team
Josiah Binet