Cheaper, US Tsys Pressured By Strong Jobs Report

ACGBs (YM -6.0 & XM -7.5) are sharply cheaper after US tsys moved back towards YTD yield highs following an unexpectedly strong US Nonfarm Payrolls Report.

• March's US payrolls significantly surpassed consensus expectations, surging by 303k, surpassing even the most optimistic estimates in the Bloomberg poll. The Unemployment Rate experienced a slight decline to 3.8% from February's 3.9%, aligning with consensus forecasts. Average Hourly Earnings saw a 0.3% increase for the month, contributing to a robust 4.1% annual growth rate.
• The front end of the US curve underperformed as market expectations for Fed rate cuts were trimmed further. The move was supported by the FOMC's stance that there is no rush to cut.
• There is 14bps of easing priced by June and 65bps in total for this year, which is less than the 75bps median projection from the March FOMC.
• Cash ACGBs are 6-8bps cheaper, with the AU-US 10-year yield differential 2bps lower at -23bps.
• Swap rates are 6-7bps higher, with the 3s10s curve unchanged.
• The bills strip has bear-steepened, with pricing -1 to -8.
• RBA-dated OIS pricing is 1-5bps firmer across meetings, with Mar-25 leading. A cumulative 30bps of easing is priced by year-end.
• Today, the local calendar sees Home Loans and Foreign Reserves data.