Daily Flows

• In addition to secondary market Semi FRN flow, WATC has launched a Feb 2030 FRN today.
• We continued to see demand for new funding from a broad range of ADI’s as we head into the middle of the month the many looking to fund a pick up in new lending
• Both foreign branches and domestic banks were active in the NCD spare with 3 month margins at +50 and +40 respectively
• Investor demand continues to see flow into the 1 year space were there remains a number of ADI’s still offering rates well north of 5% thanks to the increase in swaps rates over the past week with a 5.20% on offer yesterday.

U.S. Inflation Continues Disinflation Journey

• Yesterday, the ABS released the monthly employment data, which showed an increase of 15.9K jobs, with the unemployment rate holding steady at 4.1%.
• This marks the fifth consecutive month that the unemployment rate has remained at this level.
• While employment metrics have remained consistent, the RBA can take comfort in the recent deceleration of wage growth.
• This report pushed out NAB’s expectation for an interest rate cut to May 2025, with market pricing now indicating a possible cut in July or August.
• As referenced in recent Curve insights, the notion that a rate cut could be some way off is not entirely unreasonable.
• If employment gains stand firm, growth remains steady, and inflation returns to the target band, the RBA will have little incentive to reduce rates.