Daily Flows
- Domestic NCD margins touched the +50 mark for 3 months yesterday for the first time this year, with more banks on the lookout today.
- A strong A2/BBB+ name came to market yesterday and quickly attracted flows at 5.13% for 12 month deposits. Other A2 names were willing to pay up to 5.15% on the back of increasing competition to kick off the month.
- Semi-government FRNs continue to prove hot property, with QTC, WATC, and TCV among issuers attracting flows. More stock remains available this morning.
Soft Growth Expected for Q4 But Yesterday’s News Could Shake Things Up
- Weaker measures across inflation & building approvals released already this week point to continued cooling across the economy.
- Japan and the UK entered technical recessions in Q4 on the back of soft GDP prints and analysts expect a similar cooling of GDP locally when the data is released at 10:30am.
- One factor pointing to the potential for an upside surprise was yesterday’s announcement of a strong December quarter current account surplus, jumping $10.50 billion from Q3 to a total of $11.80 billion and almost doubling analyst forecasts.
- Net exports jumped 0.6% with government spending up 0.4%, cushioning a sharp fall in mining inventories, and providing some hope that today’s GDP numbers won’t be as soft as forecast.