Daily Flows

• An A-rated bank offered a standout 4.47% for 1-year yesterday—15 to 20 basis points above major bank levels—making it particularly attractive given its high credit rating, with a possible improvement expected today
• NCD activity remains steady, with some BBB+ issuers this week at +45bps over 3-month BBSW as they look to raise funds before mid-month.
• Suncorp Bank (Norfina Limited) priced its 5-year senior FRN at 3m BBSW +93bps, with the deal well oversubscribed amid large investor demand.

Yields Climb as Rate Cut Bets Fade

• Markets were quiet overnight, with limited new data, though sentiment held firm on the back of the US–China tariff pause and softer US CPI. Fed Vice Chair Jefferson acknowledged progress on inflation but flagged uncertainty ahead, reinforcing a cautious tone.
• US Treasury yields continued higher, with the 10-year up 7.5bps to 4.54% in a bear steepening move, as Fed cut expectations eased further — now at ~49bps for 2025, down from ~66bps last week.
• Locally, Q1 Wage Price Index came in slightly above expectations at 0.9% q/q (vs. 0.8%), broadly in line with the RBA’s SoMP and unlikely to materially alter the rates outlook.
• All eyes turn to the April Labour Force data at 11:30am, with consensus expecting a 22.5k jobs gain and unemployment steady at 4.1%.