– Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Covid Fears & Inflation Print To Come

Wednesday, 27th April, 2022

We experienced stronger flows to start the shortened week, with steady activity across a range of names and terms as funding pressures and ever-rising benchmark levels push ADI rates higher.
An attractive opportunity is available today within the BBB domestic TD space, showing 2.20% for 1-year funds.
Bank of Queensland lifted their rates yesterday, and have again lifted them significantly today, now offering the highest TD rates at most levels from 4 months to 5 years.
Judo Bank also increased their term deposit rates, offering a highly attractive 1.05% rate for 3 months, the highest in the market.
ING not only maintained but lifted their already-impressive TD rates yesterday, showing 2.40% for 1-year funds.
Intesa Sanpaolo continue to offer a very attractive option within the NCD space across the curve, offering 0.83%, 1.42% and 2.35% for 3, 6 and 12 months respectively today.

China’s zero Covid policy is providing a grim outlook for markets.
Shanghai has been in lockdown for some time now, but Beijing has recorded 22 cases within the community yesterday.
Whilst this accounts for just 1 in a million people having covid, it is highly likely to lead to a lockdown.
Markets are fearing the large disruptions that this could have on supply chains, which have just started to recover from past lockdowns.

Today see’s Australia’s Q1 inflation print.
Markets are expecting an increase of 1.70% QoQ and 4.60% YoY.
An overshoot of expectations could place serious pressure on the RBA to hike in May. If the print is aligned with expectations, WPI in May becomes very important.
June still remains a very likely scenario for the first hike. Whether the hike is 15 or 40 basis points remains up for debate.

Russia has halted the supply of gas to Bulgaria and Poland.
Russia has demanded that European counterparties pay for oil and gas in Rubles, counteracting the sanctions placed on them.
Countries that are not willing to comply have been threatened with being cut off, with Bulgaria and Poland the first to face this threat.

Curve Team