Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Treasuries Pushed Boundaries

Thursday, 21st April, 2022

Daily Flows

  • Flows into major bank term deposits were strong yesterday as they continue to offer very competitive rates across the curve, with activity ranging from 3 months to 2 years.
  • ING lowered their rates after their outstanding offer on Tuesday, with 1-year TD’s now at 1.87%, more than 30bps below their offer the previous day.
  • Bond yields continued to rise yesterday off the back of ongoing pressure from the US, but have fallen back again today. Suncorp fixed January 2027 yields again hit 4.00% yesterday.
  • Bank of Queensland have come to market this morning with a 3.5-year FRN and/ or fixed bond issue, with indicative pricing at an attractive 3mBBSW 110-115bps/ 3.90%. Books are expected to close this afternoon.

Treasuries Push Boundaries

  • Last night saw the potential boundaries of treasuries pushed.
  • After two weeks of the curve steepening, the curve shifted lower overnight.
  • The boundary of the 10Yr appears to be around 2.97%, hitting an intraday high before returning to 2.83%, where it now trades.
  •  The 2Yr was not as heavily impacted, only down a couple of points.
  • Further to this, the USD had a very strong day yesterday, making particular progress on the Yen.

Equity Earnings

  • Despite being in the early stages of the earnings season, one clear message has prevailed.
  • Margins are being compressed.
  • This comes as no surprise given the inflation pressure within the global economy, but it does highlight some inability to pass on costs to the consumer.

Nicholas Allan

Associate - Money Markets