Back The Other Way As Labour Market Report Disappoints

Aussie bonds surge from session cheaps on the back of the surprise fall in employment in January, with the unemployment rate unexpectedly ticking higher (+0.2ppt to 3.7%) and the participation rate moderating a touch. One caveat worth noting is that the ABS flagged “along with a larger-than-usual increase in unemployed people in January, there was also a similarly larger-than-usual rise in the number of unemployed people who had a job to go to in the future.” That leaves YM +3.0 & XM -4.0, with cash ACGBs running 3bp richer to 6bp cheaper as the curve twist steepens, pivoting around the 5- to 7-Year zone. RBA terminal rate pricing comes in a touch post-data, now showing between 4.10-4.15% after hovering above 4.20% into the release, as the market seemingly positioned for a firm report.