Daily Flows & Commentary BY THE CURVE TEAM –

Daily Flow & Insights – Central Bank Spooks Markets

Thursday, 31st of March, 2022

Daily Flows

  • AMP Bank have announced an increase in their term deposit rates, effective today. Their new 18-month rate is particularly attractive at 2.30%, more than 20bps above the next highest offer in this space.
  • Notable flows were minimal yesterday as we experienced a relatively quiet session. Macquarie Bank featured some sizeable inflows as both their TD and NCD rates remain a standout in the market.

Interest Rates Fall As Central Bank Steps In

  • The Bank of Japan has stepped in to the market over the past two days to buy up Japanese Government Bonds.
  • This action has seen an immediate reaction from interest rate markets with the sell off over the past month coming to a halt and yields backpedaling.
  • Australian interest rates have moved in sync with what we have seen globally. The one year swap is 14bp’s off its highs while further out the 10-year is down 27bp’s.
  • Volatility is expected to continue as central banks grapple with trying to tame supply-side inflation with a demand-side tool.
  • Ultimately this means globally, central banks may need to hit the demand side of the economy harder than it can handle in order to balance the risks to the outlook.

David Flanagan

Head of Money Markets