Cheaper After Jobs Beat, 45% Chance Of A Hike By Sep Priced

ACGBs (YM -4.0 & XM -2.0) are 4-5bps cheaper after a stronger-than-expected June Employment Report.

• Australia's June employment increased by 50,176 month-over-month, exceeding the estimated 20,000. The June jobless rate remained steady at 4.1%, matching expectations. Full-time employment rose by 43,327, while part-time employment increased by 6,849. The participation rate in June was 66.9%, slightly above the estimated 66.8%.
• (ABS) "The employment-to-population ratio and participation rate both continue to be near their 2023 highs. This, along with the continued high level of job vacancies, suggests the labour market remains relatively tight, despite the unemployment rate being above 4.0 per cent since April."
• Cash ACGBs are 4bps cheaper after the data, with the AU-US 10-year yield differential at +9bps. Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session.
• Swap rates are flat to 3bps higher, with the 3s10s curve flatter.
• The bills strip has shifted weaker after the data, with pricing -2 to -3.
• RBA-dated OIS pricing is 3-11bps firmer across meetings, with Dec-24 leading. Terminal rate expectations jump to 4.43% from 4.39% before the data.