Daily Flows
- Friday was quiet, with most term deposit traffic directed to Rabobank (A-1/A), which continues to stand out with offerings above 5.00% for 4- and 5-year terms.
- Active trading in the secondary market for recent primary issues allowed investors who missed out on full allocations to pick up decent volume.
- NCD margins held steady at +40 for 3-6 months, with 6mBBSW 10 basis points wider than 3mBBSW, encouraging many to extend duration to enhance returns.
Weak U.S. PMI Data & The Week Ahead
- The S&P U.S. Services PMI unexpectedly fell into contraction, dropping to 49.7 in February 2025, signalling declining sector activity.
- With markets expecting a rise to 53, this sharp miss prompted a strong market reaction, including the 10-year USD Treasury rate dropping 7.5 basis points, also influenced by safe-haven buying.
- The services sector slowdown was driven by near stagnation in new orders, with weaker growth attributed to political uncertainty, spending cuts, and pro-inflationary policies under the new U.S. administration.
- Looking ahead, inflation data will be released across the EU throughout the week, offering fresh insights into regional economic conditions.
- In Australia, we expect quarterly pre-GDP data along with the monthly CPI indicator, which will shape market expectations for domestic economic trends.
- The week will conclude with key quarterly GDP data and PCE monthly data from the U.S, potentially setting the tone for global markets.
