Daily Flows & Insights – Weaker Survey Results from the U.S.

Daily Flows

  • Market participants were able to roll funds in the BBB space at level of 5.40% for 1 year term deposit yesterday.
  • In order to maintain stable funding, to investors advantage, banks have been offering significantly higher roll rates in comparison to new funds.
  • NCD margins are being held up at +45 for 3 months with a few names offering this. Domestic branch banks are pricing at +50 to attract.

Weaker Survey Results from the U.S.

  • In the U.S., the preliminary composite PMI dropped from 52.0 to 50.4 for the month of August.
  • Services fell to 51.0, and manufacturing to 47.0.
  • Manufacturing fall was driven by deterioration of operating conditions throughout Q3, a decrease in output and a further drop in new orders.
  • The slowest US services sector expansion in the past 6 months was driven by a decline in new business and low demand.
  • Input prices increased faster, driven by higher wage bills and competition limited growth in output charges.
  • There is significant dissonance between the survey reading and actual data, where strong economic Data has been followed by a weaker August PMI.
  • All attention will be on the Jackson Hole symposium, with markets anticipating hawkish inflation comments but keeping the Feds keeping the possibility open of additional rate hikes.
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Curve Team
Jack Pedersen