Holding The Post-FOMC Rally Despite Jobs Data Beat

ACGBs (YM +22.0 & XM +18.2) remain sharply richer but little changed after a comfortable headline job beat of +61.5k versus +11.5k forecast. Most of the jobs created were full-time as well. The u/e rate ticked up to 3.9%, (3.8% forecast) but this reflected a bounce in the participation rate to 67.2% (66.9% forecast).

• Meanwhile, Melbourne Institute consumer inflation expectations eased to 4.5% in December from 4.9%, the lowest since January 2022.
• Cash US tsys are dealing 3-8bps richer in today's Asia-Pac session after yesterday's strong post-FOMC rally. Local participants are likely digesting the clearest signal yet that the Fed has finished its aggressive monetary-tightening campaign, by forecasting a series of rate cuts next year.
• Cash ACGBs are 18-21bps richer, with the AU-US 10-year yield differential 4bps wider at 13bps.
• Swap rates are 18-21bps lower, with the 3s10s curve steeper.
• The bills strip has bull-flattened, with pricing +12 to +28.
• RBA-dated OIS pricing is 9-29bps softer on the day across meetings beyond Feb’24. There has been little net movement since the data release. 63bps of easing is priced by Feb’25.
• Tomorrow, the local calendar sees Flash Judo Bank PMI data.
• ICYMI, based on MYEFO forecasts, the issuance of Treasury Bonds has been reduced to around A$50bn ($23.6bn has been completed): AOFM.