Daily Flows

• Yesterday in credit, we saw flow to the MTN, Bank Aus 30/10/26.
• Seasonal inflows has seen liquidity return to the market and levels across TDs and NCDs ease.
• NCDs have tightened to +45 for 3 months and TD levels in the A-2/BBB rates have cooled.

Softer U.S. Inflation a Potential Turning Point?

• Over night, U.S. CPI undershot market expectations by 0.1%, only rising by 0.1% for the month of June.
• The annual rate is now at 3.0% dropping from 3.3%.
• This print was driven by a drop in energy costs and rent prices slowing.
• The positive reading saw bond markets rally in the U.S. with yields tightening considerably and a 25 basis point cut close to full priced in for September.
• The data may be seen as a turning point as markets, giving direction and clarification to trading going forward.
• Domestically, the outlook is still muddy as we wait for a critical quarterly CPI print.