Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – RBA on Alert

Wednesday, 9th of March, 2022

Daily Flows

  • Yesterday saw healthy flows into term deposits across a range of terms and credit ratings. Judo Bank remain popular, still offering 0.80% for 3 months, while Macquarie Bank continue to receive steady funding in the A rated space.
  • Several domestic BBB ADI’s have been seeking funds as funding pressures persist, with several opportunities currently available. 0.80% is available for 6 months and 1.00% for 9-month term deposits.
  • Rapidly rising swaps have also led to increasingly attractive opportunities available within the NCD space. Intesa Sanpaolo have increased their 1-year rate to 1.17%, now the highest available in the market. Several domestic names continue to offer +20 on 3-month terms.

RBA Risk to Upside Growing

  • In a speech this morning, Governor Lowe walked through geopolitical uncertainties in Europe, the journey to full employment and recent inflation data.
  • The crux of it was that the risk are growing that inflation psyche could become more entrenched if inflation remains elevated, regardless of the drivers.
  • This creates added complexities for the RBA who would rather be patient that jump too early.
  • Subsequently it increases the risk of an earlier move but the RBA will want to hang out as long as possible.

Nicholas Allan

Associate - Money Markets