BONDS: ACGBs Yields Jump Following Strong Employment Data

Focus was on the stronger-than expected employment data today, which saw yields rise. Yield curves have bear-flattened slightly, with the 3yr underperforming across the curve.

• Australia's unemployment rate unexpectedly fell to 3.9% in November, defying forecasts and highlighting labor market resilience despite high interest rates. The stronger-than-expected jobs data, driven entirely by full-time employment gains (FT +52.6k, PT -17k), led markets to scale back the probability of a February rate cut from 74% to 50%.
• ACGBs were already on the back foot after US tsys yields rose 1-6.5bps overnight. The Aussie 2yr is trading +10.4bps at 3.886%, 3yr +11.3bps at 3.834%, while the 10yr is the best performing, trading +9.5bps at 4.277%. The 2s10s is -2bps at 37.66, while the 3s10s is -2.25bps at 43.20 erasing Wednesday's steepening move.
• ACGBS futures are currently YM -11.4 & XM -9.3
• Swaps are trading +8 to +12bps, with the short-end underperforming, curve has flattened.
• Bills strip is trading -2 to -10
• RBA-date OIS pricing has cooled 5-10bps, with the April meeting now pricing in just 24bps of cuts, down from 32bps of cuts prior to Employment. The first cut is priced in for May, with 43bps priced, while further out the curve there are 73bps of cumulative cuts priced by November.
• The AU-US 10yr spread is off monthly lows and now trades flat.
• There calendar is empty for tomorrow.