Daily Flows

• There was plenty of NCD activity to finish off last week, with offerings ranging from 4.78% to 5.00% for 3 to 6 months.
• Investors should expect a pickup in longer TDs, as stronger-than-expected jobs data is driving up the yield curve.
• A rate of 4.75% for 5-year term deposits should be achievable today, given last week’s movements.

Strong U.S. Labour Market Unwinds Rate Cut Expectations

• Last Friday, U.S. non-farm payrolls came in stronger than expected, with 254,000 jobs added, surpassing market expectations.
• As a result, bond yields sold off at the longer end as traders anticipated a more gradual easing of monetary policy.
• This sentiment even flowed into Australian markets, with reference rates climbing 5–20 basis points across the 1–5 year range.
• Markets are now barely pricing in a full 25-basis-point cut by the Fed come November, as economic indicators continue to reflect a solid U.S. economy.