Daily Flows

• Yesterday TD activity was directed to 3 month and 1 year tenors.
• At the shorter end TD levels of 4.42% by an ‘A+’ rated bank attracted flow while the BBB space saw 1 year activity with rates upwards of 4.80%.
• Today, opportunity has presented itself in a BBB name increasing their 1 year/6 month TD rate to 4.90%.
• NCD flow is still on the bid side, with margins remains around at an elevated +40 for 3 months.

U.S. Consumer Remains Resilient

• The U.S. economy grew by an annualised rate of 1.1% for Q1 2023, coming in weaker than market expectation of 1.9% and slowing down significantly from previous quarter (2.6%).
• Slowdown was driven by declines in business investment growth, declining inventories and rising interest rates.
• Growth remained propped up through strong private consumption (rising at an annual rate of 3.7%), a key metric of underlying demand.
• Although the print is weaker than forecasted, there is still strong demand from consumers for goods and services.
• In setting monetary policy, the Fed has to navigate a tricky path with bank failures, accelerated inflation, persistent demand and a strong labour market.