Daily flows

• Last Friday saw solid two way flows for Term Deposits and NCDs.
• A premium rate of 4.95% for 6 months and 1 year in the BBB space.
• With upcoming domestic inflation data on Wednesday, investors have been quick to lock in longer tenor rates at the above levels as this print could change market expectations and place downward pressure on longer rates.
• 3 month NCD margins continue to be offered at +40 with most ADIs opening to taking funds.

U.S. PMI Shows Strength

• Over the weekend, US PMI from S&P Global was released for the month of April.
• The print was better than expected with a reading of 53.7 for the services sector (Consensus was 51.5 with the previous print coming in at 52.6).
• Business confidence picked up to the second highest for almost a year, with firms enjoying improvements in demand.
• The composite PMI reading was up from the previous month of 52.3 to 53.5.
• This upturn is the quickest we have seen since May 2022.
• The market is pricing in a 90% chance of a hike of 25 basis points at the next Fed meeting.