Off Best Levels, Looking Through Data

The space operates off of best levels with YM +7.0 and XM +0.5, after the previously flagged short squeeze in YM faded a little, with gyrations surrounding the reports re: a potential sizeable U.S. SPR oil release evident, as wider market moves began to re-exert control on the space.

• Aussie bonds have looked through local data, which included much firmer than expected building approvals, in line with expected private sector credit and a continued increase in job vacancies in February (albeit at a slower 3-month rate vs. January). The latter added to the evidence of an ever-tightening labour market, with the ABS noting that “job vacancies continued to reach new record highs through the pandemic. The number of job vacancies in February 2022 was 7% higher than in November 2021, when many businesses were emerging from the Delta lockdowns. There were around an extra 200,000 job vacancies than in February 2020 - around 86% higher. The high number of vacancies shows the strong demand for workers across the economy, as businesses are responding to disruptions to operations, together with labour shortages across the economy.”
• Chinese PMIs also failed to provide any impetus for the space. As we have noted elsewhere, well-documented issues such as the localised COVID-related lockdowns evident in China & Russia-Ukraine related worry/disruptions already at the fore of participants’ minds. Note that the Chinese policymaking sphere has previously pledged to do more to support the economy, via several well-documented addresses, which is likely limiting any potential post-data follow through when it comes to market action.