Daily Flows

• A foreign branch bank is offering outright levels of 5.22% for 1 year term deposits to attract new depositors.
• NCD activity was quiet on Friday, with margins holding at +45 for 3 months.
• With end of month approaching, expect bespoke opportunities to present themselves as ADIs look to meet funding targets.

The Fed Remains Hawkish

• Over the weekend Jerome Powell made it clear that the Fed was prepared to raise rates further if needed to tame inflation, returning it to 2%.
• As has been the case since inflation has started to turn globally, central banks have taken a data dependent approach.
• Powell noted that the current level is restrictive enough however, “Two months of good data are only the beginning of what we need to build confidence on inflation path.”
• Markets saw the news as generally positive, with U.S. equities closing slightly up.

The Week Ahead

• Today we have domestic retail sales. Last month marked the second drop this year in nominal terms. Economists are forecasting a growth by 0.2%.
• Throughout the week inflation data comes out of the Europe for the month of August.
• In The U.S. Core PCE, a significant print for the Fed in deciding policy making is released.
• To finish off the week, U.S. employment data comes out.