Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow and Insights – Data Data Data

Tuesday, 11th January, 2022

Daily Flows

  • We are off to a steady start for the week. Several unrated ADIs came to market and may be seeking funds throughout the week, offering relatively attractive rates around 0.60% for 3 months. We could also see more ADIs in the BBB and A rated spaces seeking funds later in the week, creating opportunities for those looking to place.
  • Commonwealth Bank launched 5-year floating and fixed rate notes yesterday, with pricing set at 3mBBSW/ S/Q ASW +70bps and almost $5bn in bids. This is the first 5-year major bank issuance in the Australian market since the closing of the Committed Liquidity Facility late last year.

Data Data Data

  • Yesterday’s Melbourne Institute month on month (MoM) inflation print came out lower, decreasing from 0.30% to 0.20%. Year on Year levels fell too, from 3.10% to 2.80%.
  • Building approvals were strong MoM, recovering from the negative print in December (-12.90%) to 3.60%.
  • On the price action interest rates failed to break higher once again while equites walked back from the precipice after looking like another big down day was in store.
  • It will be interesting to see if these inflation numbers continue to decline, which will resonate with the RBA’s view of not raising rates until 2024. The next quarterly print is released at the end of this month.
  • All eyes will turn to the RBA when they meet in February.

The Day Ahead

  • Weekly consumer confidence, month trade balance and monthly retail sales are out today.
  • It will be interesting to see if the strong Black Friday sales will be enough to overcome the cautiousness surrounding Omicron which lead to weak Boxing Day Sales.
  • Spending in Sydney and Melbourne has decreased to start off the year as consumers play it safe, given the lack of government support.
  • Businesses continue to feel the crunch of Covid, with City Centres looking as deserted as lockdown times.

Nicholas Allan

Associate - Money Markets