Daily Commentary BY THE CURVE TEAM –

T Note Result

15th of January, 2021

Yesterday’s T note tender produced another noteworthy result.

Two T notes were issued yesterday, a 23 April 2021 and 23 July 2021. Both had a lowest accepted yield of negative 0.005%.

The last T note issuance in December also produced a negative yield. This shows that government financing costs are extremely low, which can be attributed to the actions of the RBA.

Overseas, China recorded its first death from covid since the start of the pandemic. China’s strong recovery since the start of covid has contributed to rising commodity prices, which has benefited Australia.

Already China has imposed lockdowns in certain areas to contain the virus spreading. If the virus spreads further, it will likely impact economic activity and by extension Australia’s export revenue could be impacted.

In America Joe Biden is preparing a stimulus of $1.9 trillion. This will be a big boon for the economy just as it is beginning to slow.

Weekly initial jobless claims were at the highest levels since March for the latest week. This is a reflection of the spreading virus and the waning effects of the stimulus from the beginning of the pandemic.

Today home loan data will be released. In Monday’s commentary we will give a summary of the data.

Josh Stewart

Associate - Money Markets