Good morning,

The cash rate hasn't moved and won't for another week and a half. The thing that actually shifted this month isn't the price of money, it's whether you can still get it as easily as you could.

Standing Positions

• Fix vs float on floating debt - cost steady · about 11 days to the next call

• Refinance or extend the main facility - not dearer, just harder to get

• Covenant and interest-cover headroom - holding, and now on a rate you can pin down

• Capex, commit or defer - appetite still draining, third month running

Supporting Signals

• RBA cash rate 4.35% (effective 6 May), the third hike this year, with inflation 4.2% to April; the next decision lands 16 June. RBA - Monetary Policy Decision

• ASX BBSW, 3 June: 3-month back to about 4.37% from roughly 4.44% in the week to 22 May; 1-month near 4.30%. ASX BBSW

• NAB's April survey: conditions +3 (fourth straight fall), confidence −24, capex's largest one-month drop since before the pandemic, and firms reporting business credit harder to access. NAB Business Survey

• Economist path: ANZ and CBA see no further hikes; NAB pencils August to 4.60%; Westpac sees August and September to 4.85%. Canstar

Today's Move
The extra the market was charging for three-month money has come out; the front of the bill curve is back at the cash rate. For the first time in months, the cost of locking a fix is sitting still.

Cost of Waiting
Every 25-point move costs about $2,500 a year for each $1m of floating debt. The next call is priced as a hold, but NAB has a hike to 4.60% pencilled for August and Westpac sees two, to 4.85%. So on a $20m floating book (illustrative; rate real), the two-hike path is roughly $100,000 a year you could lock off at today's settled level. Waiting a day doesn't change today's rate, it changes how much of that path is still yours to fix rather than someone else's to charge.

The Read
For a year the question was what your debt would cost. That question's gone quiet: floating carries at about the cash rate and sits still, so the interest line is finally something you can plan around.

What's moved underneath it is whether you can still get the facility. NAB has firms finding business credit harder to come by; the renewal that cleared on a call last year now comes back slower, with more conditions, even where the rate hasn't budged.

So the value this week is in timing, not in the rate. The headroom you secure while the cost is known and steady is headroom you won't be negotiating for later, when the lender's in a tighter mood.

The Trigger
The next call is already priced as a hold, so the date that actually moves your hand is the 24 June CPI. If it prints hot, August stops being a maybe, and that's the morning the fix-versus-float maths changes.

One Line
"If we had to refinance the main facility this quarter, do we actually know it would clear; and on terms we'd sign?"

Thats What Matters