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Daily Flows
Westpac has lunched a 3YR Senior Unsecured MTN with a Fixed and Floating tranche.
The initial price guidance is 3mBBSW + 82 and SQ ASQ + 82 (indicative yield of 4.88%).
The TD curve has peak outright offerings from 9-12 months.
Although 2 – 5 year offerings are lower, they have attracted flow as market participants consider future interest rate expectations.
A standout NCD margin of +65 for 3 months from a foreign branch ADI continues to attract flow.
U.S. Downgrade & ADP Employment
Two data points come out of the U.S. which may have influenced market movement: Fitch downgrading of the U.S government & ADP Jobs data.
Fitch downgraded U.S. credit rating from AAA to AA+.
Fitch agency citied governance and fiscal challenges as the points of concern.
ADP Employment change came in well above forecast at 324K (markets forecasted 210K).
Markets usually do not trade heavily of this print however it may have given a chance for equities to retrace the current run.
The non-farm payrolls released later in the week should provide more clarity on the state of the U.S. labour market.
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Curve Team
Jack Pedersen
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