– Daily Flows & Commentary BY THE CURVE TEAM –

Thursday, 20th January, 2022

Daily Flows

• Rabobank (A+) came to market with yet another 5-year FRN, printing $700m at 3mBBSW+73, a few points above the major bank issuances in the past week.
• Several domestic ADIs in the BBB to BBB+ space have been stirring strong activity across the curve, offering attractive rates as they seek funding (0.75% for 12m, 1.30% for 2 years, 1.65% for 3 years).
• We are seeing growing activity in the NCD market, with a BBB-rated domestic name offering +20 for 3 months. Several overseas names continue to show appetite.

United Kingdom

• United Kingdom CPI was released last night, recording a value of 5.4% Year on Year.
• This figure has been largely halted by the energy price cap, which is revisited in April.
• The increase in the cap will put further upward pressure on inflation.

Australia Today

• All eyes will be on employment data which is released at 11:30am AEDT.
• Unemployment is expected to fall by 0.10%, to 4.5%.
• Yesterday, Westpac Consumer Confidence data was released. Whilst the reading declined from 104.3 to 102.2, it shows a strong resilience in consumers in response to Omicron.
• In response to the Delta outbreak, consumer confidence fell 5.20%. The response to Omicron has only been 2.00%.

Markets Overnight

• U.S Equities steadied but ended the day down. Strong earnings were released, with particular note of Procter & Gamble, along with Bank of America
• U.S Treasuries saw strong buying activity, with yields pulling down. The 10Yr now rests at 1.83% and 2Yr at 1.02%.
• The Aussie Bond Curve looks like:
  • 2Yr – 0.885%
  • 5Yr – 1.637%
  • 10Yr – 2.00%
• ASX200 – 7332.50
• AUDUSD – 0.7210