- Today, CBA has launched 3YR and 5YR MTNs with a price guidance of +77 and +100.
- With Westpac pricing at +75 for 3 years, market participants should expect similar level unless CBA has a starkly different appetite for funds.
- A BBB name came to market offering competitive TD rates of 5.15% for 3 months and 5.45% for 6-12 months. Market participants who were quick to act were able to scoop the above market yield.
- There is a bid tone in the NCD market, with a few ADIs offering margins of +50 for 3 months to attract new funds.
The World Takes on Inflation, China faces Deflation
- China’s inflation came in at -0.3% YoY matching market expectations.
- Consumer demand and produce prices are falling and this is being felt globally from China’s trading partners.
- For commodity markets such as oil, supply concerns have neutralised any pricing in the slow down in Chinese activity.
- Chinese officials note that the fall in CPI may be temporary as the impact of high base from last year will began to fade.
- There is a lot of call for Chinese authorities to introduce economic stimulus to ensure the economy remains stable.
- Concerns are mounting over the nations dependence on exports and property.
- On top of this, the globally high savings rate makes restarting the economy post Covid even more challenging.