Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flows and Insights – Retail Sales and Property Prices Trending Down

5th of January, 2022

Daily Flows

  • We saw a steady start on the first business day of the year, with reasonable investor activity. Several ADIs have been eager to retain funds, while some issuers in the BBB rated space have relatively strong appetite as we begin 2022.
  • In saying this, many are waiting for the dust to settle as many are still on Christmas holidays and several unknowns in the market linger.
  • We see a long list of bond runs on offer, particularly in the FRN market. Numerous longer-dated lines continue to trade at attractive discounts, while investors with space for overseas names have been able to find strong value in lines out to 2023.

Cautiousness Surrounding Omicron Impacts Retail Spending

  • Retail spending over the December period was down from 2020 levels as consumers turned to online retailers to avoid isolation during the festive period.
  • Online spending levels suggest households are becoming more resilient to the impacts of Covid.
  • Boxing Day Sales were significantly lower than 2020 levels, falling by approximately 9.30%

Housing Market Shows Signs of Cooling

  • House price growth slowed in Sydney and Melbourne for the first time in 14 months.
  • Melbourne house prices decreased by 0.10% in December, whilst in Sydney prices only rose by 0.3%.
  • This comes on the back of a surge in listings which is coupled by affordability constraints and headwinds for interstate migration.
  • Sydney house prices rose 29.6% in 2021, adding nearly $1000 a day, over the 12 month period.

Nicholas Allan

Associate - Money Markets