Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Reference Rates Balloon

Friday, 29th April, 2022

Daily Flows

  • Yesterday saw an extraordinary day in rates movements, with nearly all active ADI’s adjusting their rates by as much as 30-40bps across the curve to adjust to rapidly changing reference rates.
  • Rates are now the most attractive they have been in more than 2 years, with several investors jumping on the opportunity yesterday.
  • Judo Bank continue to offer the highest TD levels at most terms, offering 1.30, 2.01 and 2.74% for 3, 6 and 12 months respectively.
  • ING are still showing very attractive levels particularly given the credit rating, showing 2.70% for 1 year and 3.97% for 3 year funds. Major banks are also showing strong and rising rates.
  • Fixed bond yields increased significantly yesterday as expected. 4.35% could be found on a BOQ October 2026 line, notably above equivalent TD levels. FRN margins held relatively steady but are of course increasingly attractive off of rising benchmark rates.
  • NCD outright rates are increasing in the same way, with 3-month margins available at +25 to +30.

Reference Rates

  • Reference rates increased significantly yesterday, as the market steers the RBA to increase the cash rate earlier.
  • 3-month BBSW increased by 17 basis points, while 6-month BBSW increased by 21.
  • The market is pricing in a rate hike next week when the RBA meets.
  • Inflation beating expectations has stirred up the market, causing significant sell off in interest rate markets.
  • With the market moving so quickly, price creators are struggling to keep up. Some ADIs found themselves setting pricing in the morning, and having to revise them come midday.


  • U.S. GDP came in softer than expected yesterday.
  • The consensus was for a seasonally adjusted increase of 1.00%, but rather GDP fell by 1.40%.
  • However, the breakdown of GDP displays more strength than the number leads on.
  • Personal consumption was up 2.70%, disposable income rose 4.80% and private investment up 2.30%.
  • The single largest factor pulling back GDP was a significant increase in imports, up 17%.
  • Equities were rather nonchalant about the read, drawing from the positivity of strong earnings released overnight.

Lawrence Vosper, Nicholas Allan

Associate - Money Markets