– Daily Flows & Commentary BY THE CURVE TEAM –

Wednesday, 13th April, 2022

Daily Flows

• Flows were more subdued yesterday, with a few substantial tickets but limited volume and diversity overall.
• Judo Bank increased their NCD margins significantly yesterday, now pricing very competitively in the market at +25 for 3 months. Their 8-month rate is also a particular standout, with yesterday’s outright level equating to 1.48%.
• Bond volume and levels have been relatively stable so far this week. Numerous lines remain available at a significant discount, and major banks continue to offer notable value.

U.S CPI

• Yesterday’s U.S inflation read provided the market with mixed signals.
• Headline inflation increased by 1.20% MoM, and 8.50% YoY; a figure which is largely concerning and beating market expectations.
• However, core inflation rose less than expected, lifting 0.30% MoM.
• Used car prices placed strong downward pressure on the read, while housing costs and services increased.
• Core inflation increasing by only 0.30% MoM highlights that the inflation curve may be starting to reach the peak.
• This read is not likely to change the Fed’s plan to hike by 50 points at the next meeting.

Business Confidence & Conditions

• NAB Business Confidence and Conditions were up yesterday.
• Despite inflation concerns, businesses have been able to pass prices on to consumers.
• Surprisingly, the ANZ Consumer confidence read also increased.
• Ultimately, businesses are happy with passing on prices, and consumers are apparently not too phased by the increased pricing.