Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – RBA to Hike, China Lockdowns Ease, Boris Triumphant

Tuesday, 7th June, 2022

Daily Flows

  • Yesterday saw strong flows across several products. There was steady activity around 6-month term deposits, with a BBB ADI showing 2.50%.
  • 3-month NCD’s again reached +30 to secure funds, with standard market levels remaining around +25.
  • NAB launched a new convertible bond line, Capital Notes 6, with an expected yield of [4.39-4.59]%. The security has no fixed maturity date but is scheduled for mandatory conversion into NAB ordinary shares on [17 September] 2032. Bidding is still open today.
  • Bond flows were healthy, with activity into the Bendigo March 2025 floating line, as well as interest in the January 2027 Suncorp floater at +114.

RBA Meet Today

  • The RBA meets today and the cash rate is very likely to be hiked.
  • Debate remains as to whether the hike will be 15, 25 or 40 basis points.
  • The breakdown of economist predictions is as such: 11 calling for 40 basis points, 9 for 25 basis points.

China Lockdowns

  • China’s covid situation is improving. Beijing is seeing loosened restrictions, and Shanghai only has pockets of locked down areas.
  • Whilst this is fantastic news for supply chains, further pressure will be placed on oil prices.
  • Oil prices retracted with the news that China was heading into lockdown, but has been trending up as these restrictions have been eased.
  • The situation is truly a double-edged sword.

Boris Johnson Triumphant – Just

  • A vote of confidence was conducted in in England overnight.
  • Dissatisfied MPs called the vote and tried to overturn him.
  • Boris won marginally, 211 votes to 148.

Lawrence Vosper, Nicholas Allan

Curve Team