Daily Commentary BY THE CURVE TEAM –

Daily Flows and Insights – Gyrations Continue

23rd of December, 2021

Flows

  • While many wind down activity heading into Christmas, we continue to see healthy flows into TDs, with several ADIs seeking funds. AMP closed the doors to financial institution term deposit applications, but they continue to offer the highest rate for non-FI investors (1.00% for 6mth).
  • We have seen some slowdown in client bond flows as some close for the Christmas break but offers into the market remain strong for those looking. Long-dated FRNs are offering reasonable yields at a discount, such as Bendigo June 2026’s at +76.

Market Gyrations Continue

  • Thin market trade heading into the holidays continues to result in heightened volatility in markets.
  • Equities were up again overnight while the long end of the yield curve saw yields a little higher.
  • Short end rates were lower with the one year swap falling back below 0.40%

Covid Spreads

  • Omicron continue to spread with case numbers jumping above 5000 in NSW and 2000 in Victoria.
  • Hospitalisations and ICU admissions so far haven’t tracked materially higher with case numbers.
  • Data out of South Africa, who were the first to be hit by Omicron, are points to case numbers peaking which is a positive for what we face on the other side of the holiday period.

David Flanagan

Head of Money Markets