Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Data Evident of Hesitant Economy

Wednesday, 11th May, 2022

Daily Flows

  • 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.

Household Spending Down, Business Conditions Rise

  • 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.

Fed Speak Suggests 75 Basis Point Rise Not Ruled Out

  • 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.

Lawrence Vosper, Nicholas Allan

Curve Team