Daily Flows

• To compete with major bank offerings, we observed rates as high as 5.18% for a 6-month term deposit from A-2/BBB+ domestic banks.
• Foreign branch banks continue to attract flows with NCD offerings of +50 for 3 months.
• In the fixed income space, demand for shorter-dated semis has increased, with TCV FRN 2027 and QTC FRN 2028 seeing two-way flows.

U.S. Inflation Continues Disinflation Journey

• Last night, the CPI met expectations, with core monthly inflation at 0.3% MoM and 3.3% YoY.
• The overall CPI, including food and energy, rose 0.2% month-over-month and 2.6% annually, marking the first annual acceleration since March.
• Following this data release, short-term bond yields edged down, and a 4/5 chance of a rate cut by the Fed in December is now priced in.
• Trump’s tariff plans continue to create uncertainty in the markets, with unclear plans on how they might impact inflation and economic activity.
• Fedspeak has suggested that the data supports a December cut, though officials aim to moderate their response; Dallas Fed President Logan noted that the pace of cuts should be gradual.