Looking Through another solid Labour Market report

Aussie bonds were immune to a solid round of local labour market figures, outside of some contained chop around the data release itself. YM unchanged, XM +2.0 at the bell, while the cash curve saw some light bull flattening.

• The headline uptick in employment matched expectations, with the same holding true for the participation rate, allowing the unemployment rate to edge 0.2ppt lower to 6.6%. Underemployment is now back to pre-COVID levels, while underutilisation remains elevated vs. pre-COVID levels, albeit well shy of the 2020 peak (last printing at 15.1%). On the hours worked front the ABS noted that "the recovery in hours worked and employment slowed in December." Still, "since the low point in May, total hours worked has increased by 161.5 million hours, recovering 87% of the 185.6 million hour decrease between March and May."
• Elsewhere, the RBA conducted its latest round of ACGB purchases, while IADB launched a A$300mn minimum round of Aug '28 A$ issuance.
• Friday brings A$700mn worth of ACGB supply, the AOFM's weekly issuance slate and local flash retail sales data.