Daily Flows
- Significant flow was directed to AMP’s 6 month term of 5.10%, with this rate now being lowered to 5.05%.
- In the NCD space, there is opportunity to pick up ‘A’ rated foreign branch paper upwards of +30 for 6 months.
- Compared to the start of Jan, Senior Unsecured Issuance has been quiet as of late.
Westpac Leading Index Shows Moderate lift in Economic Momentum
- Yesterday, The Westpac–Melbourne Institute Leading Index’s six-month annualised growth rate dipped slightly to 0.25% in December, down from 0.33% in November, but remains in positive territory, signalling a moderate lift in economic momentum for early 2025.
- GDP growth is forecast to improve gradually throughout 2025, reaching 2.2% Y/Y by year-end, up from the weak 0.8% Y/Y pace seen to September 2024, although growth remains below trend.
- Sustaining this momentum into 2025 faces challenges, including risks from global trade tensions, geopolitical uncertainty, and the timing of expected domestic rate cuts.
- The RBA is likely to keep the cash rate unchanged at its February meeting. Westpac is forecasting an easing cycle to begin in May. A reduction in inflationary pressures could bring forward rate cuts, but broader risks may delay the process.
- Tight labour market conditions, which stalled rebalancing efforts in late 2024, remain a key concern for the RBA as it weighs inflation risks against the need for less restrictive monetary settings.
