Daily Flows

• With only two full weeks left for the remainder of the year we expect that ADI’s will be laser focused on getting positions in order this week to avoid any last minute rush.
• There will be plenty of churn expected with large amounts of maturities over the next two weeks which will see ADIs competing to retain maturities vs those looking to fill funding gaps ahead of the holiday period
• We saw more of the same on Friday with plenty of activity in the NCD market, still largely concentrated around the 3 months are with margins still contained at +45
• Demand for TD remains solid as ADIs come in and out of the market subject to their demand from day to day with rates continue to hold above 5% all the way out to 12 months before tapering off

The Week Ahead

• This week will see the last meeting of the RBA for the year and there will be plenty to chat about after last week softer than expected growth figures.
• Ahead of the meeting the market currently has 3 rate cuts priced in for next year with them to be delivered gradually beginning in the second quarter.
• Based on the RBA’s recent rhetoric, this still appears aggressive which is why all the focus will be on the RBA’s updated assessment of the outlook following the weaker GDP numbers.
• On Friday night we got the latest employment data from the US which on balance was a touch softer, pointing towards continued gradual easing from the US Federal Reserve.
• Focus for the US this week will be on the latest inflation update due Wednesday night.