Daily Flows

• A +60 NCD special attracted significant flows yesterday in the A2 space as investors locked in above-market yields.
  
• Several A2/BBB+ banks are touching 5.35% for 12 month term deposits today as they look to plug funding gaps to finish the week.
  
• Unrated ADIs remain on the bid with 5.20% for 3 month deposits and flexibility at longer terms for those market participants with limits for unrated names.

Softer Prices The Theme of the Week, Sparking Rally

• There was more soft pricing data out of the US overnight with producer prices unexpectedly falling in May, with lower energy costs partially responsible.
  
• Economists projected demand increasing 0.1% MoM but instead saw an 0.2% drop, the largest decline in seven months. 
• Core PPI finished flat at 0.0% with annual growth coming in slightly lower than expected at 2.2%.
  
• Australian yields dropped further this morning on this softer US inflation data with 5-6 point falls across the curve. The Aussie 10 year is sitting at 4.14%, down 20 bps from Tuesday.