Daily Flows
- The consideration of future reinvestment rates continues to drive term deposit flow to the longer end. Although 2-5 year rates are lower than the shorter end, market participants see value in current levels as rates are expected to decline.
- Two-way flows persist in the NCD market, with pockets of demand driving activity.
- Last week, there was a noticeable trend of flows directed towards non-fossil fuel counterparties and away from major bank offerings when possible.
The Week Ahead
- Last week closed quietly after a volatile beginning. With calm in the markets, it is expected that we will see less volatility arising from tier 2 data points and more focus on comments from the Federal Reserve.
- In Australia, we look forward to the release of Consumer Business condition surveys and the Q2 Wage Price Index tomorrow.
- Consumer sentiment fell last month, and it wouldn’t be surprising if this downward trend continues given the hawkish rhetoric by the RBA.
- Overnight on Tuesday, monthly PPI data will be released in the U.S., with an increase of 0.2% MoM forecasted.
- The week finishes with inflation and retail sales data from the UK and U.S., as well as employment data from Australia.