Daily Flows

• Yesterday, Westpac’s 5-year MTN launch tightened, pricing at +85. We saw ADI’s direct flow into BOQ 2029 floaters in the secondary market, where they enjoyed the same risk weight but considerably wider margins, over +105.
• +40 remains the going margin in the domestic NCD space for 3–6 months, and the term deposit curve is flat out to a year, all hovering just below 5.00%.

U.S. PPI Firms Up 25 Basis Point Cut by the Fed & ECB Cuts as Expected

• The ECB cut rates by 25 basis points, bringing the deposit facility rate to 3.50%.
• Forward guidance emphasised a data-dependent, meeting-by-meeting approach, leaving the door open for another rate cut next month (60% probability). Another ECB rate cut is expected in Q4.
• U.S. August PPI rose 0.2% month-on-month, with year-on-year producer prices up 1.7%, below forecasts. The core CPI increased 0.3%, with the annual core rate steady at 2.4%.
• The U.S. PPI data came in lower than market expectations, though some traders are still considering a 50 basis point cut.