Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – China Growth Stalling

Tuesday, 17th May, 2022

Daily Flows

  • It was a pretty steady day to start the week yesterday.
  • 3mBBSW hit a post-pandemic high of 1.00%, drawing investor attention to variable products, with foreign ADI’s drawing solid funding at +25 for 3-month NCD’s.
  • TD activity was quite standard. AMP Bank proved popular with a great rate in the 5 month term at 2.15%.

China Growth Impacts the Market

  • Data released from China overnight displayed two key things. The first being the significant toll that prolonged lockdowns are having on the Chinese economy. The second being that China’s blissful period of economic growth may be coming to a halt.
  • Year on Year retail sales fell much larger than expected, coming in at -11.1% versus -6.60%.
  • Industrial production fell much larger than expected, down -2.90% YoY versus 0.50%.
  • Property investments was also down, coming in at -2.70% versus -1.50%.
  • Whilst the data was negative, positivity came from covid cases falling in Shanghai and prospects of lockdowns being ended.
  • Markets were mixed overnight in response.

Australian Data Today

  • Consumer confidence comes out this morning. It will be interesting to see if there is any retracement from the big falls last week post RBA.
  • Minutes of the RBA May meeting are released today. Markets will be looking for greater insight to the Australian interest rate profile.

Lawrence Vosper, Nicholas Allan

Curve Team