Daily Flows

• The final week of the financial year will be an opportune one for investors with surplus cash, with opportunities expected to present themselves from ADIs looking to plug short-term liquidity gaps before June 30.
• An A1/A bank led the charge for 12 month term deposits on Friday, paying 5.27%. Another A1/A bank was top of market at 5.21% for 6 months.
• NCD levels remain elevated with +55 for 3 months setting the tone today, but this market will be one to watch as the week plays out with the potential for margins to creep northwards if demand persists.

The Week Ahead

• Australian CPI is the highlight of a quieter week of data to round out the financial year, expected to print at an 0.2% increase to 3.8% on April’s 3.6%.
• Westpac’s consumer confidence data (Tuesday) will be one to watch after a string of monthly declines in the index, which currently sits right in line with the 1 & 2 year average levels but a full 12% below the 5 year average.
• Across the Pacific, the Fed’s preferred inflation metric is due out on Friday night Australian time, with core PCE expected to inch up 0.1% after April’s 0.2% increase.
• Money markets are not expecting an upside surprise here with rate cut expectations creeping up over the last week. Markets are now pricing in a full Fed cut by November with a second in January 2025.