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.