Daily Flows
- In the NCD space, we continue to see flows directed to foreign branch banks that are willing to offer levels above domestic pricing to attract.
- Term deposit market participants continue to lock in duration where they can, with rates upwards of 5.20% for 4 and 5 years.
- Last Friday, there were bids for a Rabobank fixed coupon Medium Term Note, maturing on 26/02/2029.
U.S. PCE Firms Up The Possibility of a September Rate Cut and The Week Ahead
- U.S. PCE came in line with expectations, confirming that the disinflation progress remains on track.
- The Federal Reserve will be pleased that they are well on their way to achieving their target of 2%.
- This data did not move pricing on potential monetary changes at this meeting; however, it reaffirmed that a cut in September is likely.
- It is an important week here in Australia with Q2 inflation data being released on Wednesday.
- There is significant dissonance across markets and economists over the current monetary outlook. Currently, the market is pricing in a 25% chance of a hike, and approximately 10% of Bloomberg economists are forecasting a hike in August.
- Retail sales will also provide clarity on the state of the consumer and levels of spending, with the monthly reading expected to come in 0.2% lower than last month.
- Finishing off the week, the Fed meets to make a decision on monetary policy. A more dovish tone is expected, priming markets for a September cut.
