Fresh Pressure Post-Labour Market Report

Aussie bonds slide on the back of the much stronger than expected labour market report (see previous bullet for deeper details), after a larger than expected jump in employment allowed the unemployment rate to slide to a fresh cycle low. YM took out its overnight session base on the move, and last deals -16.0, 3.5 ticks off the initial reaction lows, while XM is -5.5, 1.5 off worst levels, as the bear flattening of the curve extends. Bills run 8-35bp lower on the day, with the front end of the strip leading the move. This report will help when it comes to keeping RBA tightening frontloaded, with BBG WIRP now indicating ~60bp of tightening being priced in for the next RBA decision (vs. 45bp late on Wednesday), with a cash rate of 3.35% seen at the end of the RBA’s Dec meeting (vs. ~3.05% late Wednesday).