Daily Flows

• Given the holiday period, Friday still saw below-average trading activity.
• Today, CBA has started the year with a bang, issuing a 5-year Floating/Fixed MTN with initial guidance of 3m BBSW +90.
• Judo Bank continues to attract NCD funds with an offering of +50 for 3 months

Weakening Aussie Dollar: A Cause for Inflation Concern?

• Recently, the Australian dollar has been weakening due to perceived and actual weakness in the Chinese economy, as well as strength in the US dollar.
• Currently, it is sitting at 0.6219 US cents, a two-year low.
• A weaker Aussie dollar can be inflationary as the cost of imported goods increases in AUD terms.
• Australia imports a significant amount of fuel, which means the weak dollar will raise its price.
• These are the kinds of factors the RBA will monitor and consider when making a decision on monetary policy in February.
• If the weakness persists, the timing of rate cuts may be delayed to ensure inflation remains in check.