- Off the back of softer than expected domestic inflation data, reference rates dropped 4-20 basis points from 6 months – 5 years.
- Whilst this drop may levels above 5.00% not being offered for 2-5 years, diligent investors were able to take advantage of a 5 year term deposit at a rate of 5.13%.
- NCD margins continue to remain at +45 with demand keeping the margins elevated.
U.S. Regional Banks Have Markets Apprehensive
- New York Community Bancorp NYCB spooked markets after they posted surprise losses and cut their dividends.
- Warnings over bad debt exposure from US and Japanese banks also fuelled a selloff of bank equity.
- Commercial real estate is a main source of concern in the U.S. as banks face mounting loses from this area.
- Similar to the SVB crisis last year, this concern seems to be somewhat isolated but markets will definitely keep an eye out as the news progresses.
- Jerome Powell was clear to keep the Feds options open and kill hopes of a march cut however, potential financial instability may leave the door open.