Daily Flows & Insights – US Markets Start 2024 where 2023 Left Off

Daily Flows

  • Funds flowed into the A1/A name showing 5 year rates at the 5.30% mark as another A1/A name continued to pay 5.22% for 1 year deposits.
  • Foreign branch banks were showing margins of +50 for 3 months and up to +60 for 6 months to secure NCD funds yesterday.
  • With government funding for religious organisations flowing in this week, today marks an opportune time to secure attractive rates, especially in the A2/BBB+ space.

US Markets Start 2024 where 2023 Left Off

  • US equity markets continued their strong start to 2024 overnight with the S&P 500 finishing with a second consecutive record closing high. The NASDAQ was up 0.32% overnight, up to 2.32% YTD, with the Dow Jones and S&P 500 also in the green, the latter up 1.70% on the year so far.
  • It is worth noting the narrowness of this rally to start the year with just four of 11 S&P 500 sectors in the green, with the “Magnificent Seven” continuing to mask softer underlying returns to date.
  • Strong equity markets have slightly dampened expectations of rate cuts in the US, with markets pricing in less than 6 full cuts by January next year down from more than 7 just last week, as expectations continue to fluctuate.
  • NAB’s business confidence & conditions survey is out today, with expectations of a continued decline in confidence as has been the trend since October 2021. Softer household confidence, if it leads in to cooler Q4 inflation in next week’s print, will continue to add to the case for a dovish pause in the RBA’s February meeting.
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Curve Team
Josiah Binet