Futures Back Above Pre-Halt Levels

Futures now sit above their pre-halt levels, with the initial cheapening impulse from the firmer than expected labour market data fading. Why? Firstly, U.S. Tsys are bid, which will have created some spill over into the ACGB space. Secondly, although some have rolled forward their RBA lift off expectations to June, that scenario is fully priced by the market already. As we noted earlier, this labour market report isn’t a gamechanger on its own (at least when it comes to market pricing), given the Bank’s focus on labour costs (yes tightening labour markets will feed through into labour costs, but the explicit impact of the February labour market dynamic on labour costs is not observable at this stage), allowing the spill over bid from U.S. Tsys to dominate. YM -5.5 & XM -2.0 at typing.