Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – The Data Ahead

Monday, 18th July, 2022

Daily Flows

  • We saw some busy flows in the back half of last week after a much quieter start.
  • NCD and bond flows were particularly strong as reference rates continued their upwards march, reaching their highest levels since early 2019.
  • Bond flows into major bank floating lines proved a standout, with terms ranging anywhere from 1 to 5 years. While outright yields generally sit below equivalent TD and NCD levels, the flexibility and liquidity of bonds remains a highly attractive feature to many investors.
  • Bank of Queensland marketed an expression of interest for a 2.5-year bond issuance but decided not to go ahead with the deal. This move potentially indicates that investors continue to drive the current deposit market.
  • An outstanding 12-month TD special is available today, with a BBB ADI offering 4.35%. This is significantly above anything else we are seeing in the market.
  • Several ADI’s are now sitting flush after a spike in surplus investor funds appearing mid-month. There may now be a brief pause in the negative funding gap, at least until we approach end of month.

The Week Ahead

  • It will be an interesting week of data ahead after the pieces of significant news received last week.
  • The RBA minutes for the July meeting will be released tomorrow, hopefully giving more insight into the central bank’s take on the current environment.
  • NAB Business Confidence for the second quarter is released on Thursday. This could be an interesting read to compare to last week’s weekly data, which produced a new low in confidence off the back of rate hikes, inflation and an increasingly tight labour market.

Lawrence Vosper

Curve Team