Daily Flows & Insights – Fewer Walls as New Household Supply Falls; Tonight, US Job Hauls

Daily Flows

  • Strong fixed income flows yesterday as investors capitalised upon ratings upgrades for the regional banks, snapping up floating BoQ and Bendigo & Adelaide Bank lines.
  • 6 and 12 month term deposit yields have come off the highs of this time last week, but opportunities remain for 5.21% (A1) for 6 month deposits and 5.15% (A2) for 12 months.
  • +50 remains the high-water mark for NCD margins today from a domestic A2/BBB issuer.

Fewer Walls as New Household Supply Falls; Tonight, US Job Hauls

  • Australian building approvals fell in February by 1.9% on expectations of a 3% rise, marking the third successive negative month in a data set that is traditionally relatively volatile.
  • Despite 620,000 new migrants over the age of 15 entering Australia in the past year alone, just 163,000 new buildings were approved in the year to February. This marks the lowest number of approvals in over a decade, since March 2013.
  • Inflationary dynamics remain persistent in the housing market amid pressures on supply and ever-increasing demand, suggesting property prices will continue to soar while there is such a high demand-supply imbalance.
  • Looking to the US, jobs data out tonight is expected to point to a resilient employment market, with unemployment projected to tick down slightly to 3.8%.
  • Non-farm payrolls are tipped to grow by 214,000 jobs, down slightly from February’s 275,000. Despite continuing the recent downward trend in job growth over the last four years, healthy overall employment data will do nothing to change the Fed’s current “watch and wait” approach.
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Curve Team
Josiah Binet