– Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Data Evident of Hesitant Economy

Wednesday, 11th May, 2022

Trade activity was relatively standard yesterday. BBSW decreased, with 6mBBSW falling significantly for the first time since the start of April.
Judo Bank lifted their longer-term rates, now offering the highest levels at 3 and 5-year terms, showing 4.30% for 5 years.
A domestic BBB attracted solid funds in the TD space, offering 1.40% for 3 months and 3.00% for 1 year deposits.
ING (A-1/A)also raised their rates with an absolute standout 3.08% 1-year offer.
Several ADI’s were giving +20 on 3-month NCD’s, attracting notable flows.

The data out of yesterday was quite insightful to the framework of the Australian Economy.
CBA Household Spending was down -3.80% MoM. It comes as businesses start to pass on increased input costs and consumers bear the brunt of inflation.
Interestingly, NAB Business Conditions increased from 18 to 20, yet Business Confidence fell majorly from 16 to 10.
Again, it outlays the current economic conditions, where businesses face increased inflation. Business conditions continue to rise as more consumers return to city centres, and life returns to a pre-pandemic normal.
Quarterly retail sales data saw a 1.20% increase, beating expectations of 1.00%.
Consumer confidence is released this morning, which should further indicate the above.

Overnight, Cleveland Fed President, Loretta Mester, highlighted that a 75 basis point hike shouldn’t be ruled out.
While Powell has told markets that 50 basis points is likely, Mester’s comments spooked markets.
Equities sold off in response, before recovering throughout the trading day.
U.S. CPI is released late this evening, a highly watched print that has the ability to substantially move the market.

Curve Team