– Daily Flows & Commentary BY THE CURVE TEAM –

Monday, 30th May, 2022

Daily Flows

• Activity was generally quieter last week, with strong ADI demand but limited investor funds to go around as the strong negative funding gap persists.
• Activity picked up again on Friday, with numerous trades across different ADI’s, credit ratings and terms; demonstrating the range of opportunities currently available. Bank of Queensland attracted particularly strong investment, still offering some of the highest rates available in the market.
• NAB came to market last Wednesday with 3-year fixed and floating lines, printing a total of $2.75bn across the two tranches. The fixed priced at a yield of 3.9535% while the FRN had a margin of +90. Both lines stirred strong interest from our investors at these attractive levels which were notably above comparable lines in the secondary market.
• Several ADI’s continue to seek funds into the new week, with rates highly open to negotiation in the competitive current environment.

Huge Data Dump Ahead of RBA

There will be a huge amount of data for the RBA to distill this week ahead of their next meeting including:

• GPD partials: Balance of Payments, Company operating profits, Inventories and Government spending on Tuesday. Also out will be private sector credit and weekly consumer sentiment
• The final GDP figure will be out Wednesday with current expectations a 0.6% increase for Q1 seeing the annual rate slow from 4.2% to 2.8%
• Thursday will see the trade balance released.
• On Friday we will get the latest new lending data.
• Also Friday night we will get the all important Non-Farm payrolls report.

All of these releases will be crucial ahead of what will be a very interesting RBA meeting next week. After starting their tightening cycle in May, the market will be keenly awaiting the RBA’s next decision to make a better assessment of the speed of the tightening cycle for the rest of the year.