Daily Flows

• Friday was quiet, with Victoria off for the AFL Grand Final, resulting in minimal flow across TDs and NCDs.
• Today marks the last day of the quarter, which may lead to bespoke offerings in the market.
• The 6-month tenor continues to see rates offered well above the 5.00% level.

U.S. PCE Data Supports Aggressive Fed & The Week Ahead

• The US core PCE price index, the Federal Reserve’s preferred inflation gauge, rose by 0.1% month-over-month in August 2024, below market expectations of a 0.2% rise, and down from the previous month’s 0.2% increase. On a year-over-year basis, core PCE prices increased by 2.7%, slightly above July’s 2.6%.
• The softer-than-expected inflation data aligns with the Federal Reserve’s view that inflation is easing, strengthening the case for a potential aggressive rate-cutting cycle.
• Focus now shifts to key labor market data this week, including JOLTS, ADP employment, and nonfarm payroll (NFP) reports.
• Domestically, it is a quiet week ahead, with Balance of Trade data and an array of Tier 2 data scheduled for release.