Jobs Report Helps Send AUD Rallying, USD Falters Along Tsy Yields

The Australian dollar has taken the lead in G10 FX space as December data showed that the jobless rate tumbled to a 13-year low on the back of a slightly firmer than expected growth in employment. As a caveat, the data were collected "prior to the high number of COVID cases associated with the Omicron variant."

• Earlier, Westpac had changed their RBA tightening call and now expect the Reserve Bank to deliver the first cash rate hike in August rather than February 2023. They believe the next hike will come in October.
• AUD/NZD printed its best levels since Jul 14 last year and is narrowing in on the NZ$1.0700 mark. Suspected trans-Tasman flows may have sapped strength from the kiwi, which sits at the bottom of the G10 pile.
• The DXY has just pierced yesterday's low amid broad-based greenback sales paralleled by a retreat in U.S. Tsy yields. This dynamic has lent support to the yen, with USD/JPY descending towards the Y114.00 figure, although it is a Gotobi day today.
• Spot USD/CNH has only shed a handful of pips, showing remarkable stability despite fresh policy easing out of China. The PBOC slashed its 1-Year & 5-Year Loan Prime Rates by 10bp and 5bp respectively, in the latest manifestation of its pro-growth stance. The central bank also delivered the strongest yuan fixing since May 2018, but the reference rate was fairly close to the sell-side estimate.
• U.S. weekly jobless claims, final EZ CPI, ECB Dec MonPol meeting minutes & Norges Bank MonPol decision will take focus after Asia hours.