Daily Commentary BY THE CURVE TEAM –

Daily Flows and Insights – SME Loan Guarantee Adjusted

14 December, 2021

Flow Highlights

  • The acute pressure on unrated ADI’s has eased a little to start the week with the 1.00% for 90 days now gone. Best of the rest yesterday was 0.90%
  • Margins on NCDs remains off the lows with +15 still readily available from a number of domestic issuers with some still offering up to +20
  • Bond flows picked up yesterday as clients look to square up their investment positions ahead of the end of the year UOB May 2024 were popular while there was some demand for semi government bonds.

Business Loan Scheme Extended

  • The small and medium business loan guarantee has been cut to 50% from 80%.
  • However, it has been extended by 6 months to the end of June next year.
  • Over $7 billion worth of loans have been written under the scheme.
  • A lack of workers and supply chain issues, rather than credit availability are still considered the most pressing issues for businesses.

Central Bank Meetings Await

  • A raft of central banks meet this week.
  • Notably, the Fed, ECB and Bank of England.
  • For the Fed, accelerating tapering of QE will be on the agenda.
  • For the ECB, their stance on transitory inflation and whether they will renege and say it is persistent will be of interest to markets.
  • And for the Bank of England, there is every chance they will raise the cash rate.

Josh Stewart

Associate - Money Markets