Daily Flows
- The standout fixed income offering was a Bendigo May 2026 fixed line, which was snapped up at a yield to maturity of 5.75%.
- Yesterday, pricing from major banks saw mutual banks offering 5.50% for 1 year to attract term deposit funds.
- NCD margins are holding at +45 as banks look to bolster cash on hand for the holiday period.
The Fed Holds Rates and The Yield Curve Reshapes
- The US Federal Reserve decided to keep interest rates steady in the range of 5.25% to 5.50%.
- US stock markets reacted positively, while the US dollar weakened and US Treasury yields fell.
- The market started betting on potential rate cuts by June of the following year.
- Yields on longer-dated Treasury securities had risen about 1 percentage point since the last rate increase in July, with the question being whether further rate hikes were needed, depending on sustained rises in open-market borrowing costs.
- The US 10-year Treasury yield declined by 12 basis points, reaching 4.76% and the US 2-year Treasury yield also saw a decrease of 11 basis points, reaching 4.96% with 2/10s flattening to -21 this morning.
- Australia is following suit with 10 year futures rallying by 15 basis points this morning.
- It seems the yield curve is reshaping as the markets digest the future interest rate outlook.