Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Swap Pushes Out, Inflation Print to Come

Tuesday, 26th April, 2022

Daily Flows

  • We kick off another shortened week after the ANZAC long weekend. Markets were volatile on Friday with an enormous jump in reference rates, but flows into term deposits and NCD’s were relatively neutral leading into the weekend.
  • ING again significantly increased their rates on Friday, with 12 month TD’s available at a highly competitive 2.30%. Again these are not necessarily expected to continue into the new week, but highlight the strong and sometimes sudden demand for funding in the current environment.
  • Macquarie Bank have announced a raise in TD rates, effective today. The A+ rated ADI continue to offer exceptional rates, especially given the credit rating.
  • BOQ have also lifted TD rates this morning as ADI’s adjust to rapid moves in BBSW.

Lawrence Vosper

Associate - Money Markets

Swap Pushes Out

  • The Swap Curve pushed out considerably on Friday.
  • 1Yr swap saw an incredible 16 point increase, 6-month BBSW also increased by 9 points.
  •  Reference rates continue to drive markets and have done so since October last year.
  • 1Yr swap has pulled back this morning, but term deposit and NCD rates should continue to reflect this increase today.

Eyes Turn To Inflation

  • Q1 Inflation data is released tomorrow in Australia.
  • The print is expected to beat the RBA’s February forecast by a considerable amount.
  • The market is expecting trimmed mean to come in at 1.20% QoQ, 3.40% YoY.
  • Whilst this print will be significant in the RBA’s decision to hike, it is not likely to be the sole determinant.
  • Rather, wages data which is released mid May will be what the RBA will wait for.

Nicholas Allan

Associate - Money Markets