Richer After Jobs Miss, Unemployment Rate At 4.1%

ACGBs (YM +10.0 & XM +10.0) are 6bps richer after January’s Employment Report disappointed, with a jobs gain of just 481 versus expectations of +25k. The Unemployment Rate rose to 4.1% versus 4.0% est. and 3.9% prior.

• Also, Melbourne Institute Consumer Inflation Expectations for February have stalled at 4.5% as rising petrol prices were probably offset by the good Q4 CPI news, which was covered widely in the press. Expectations have now been at 4.5% for the last 3 months, just above the historical average.
• Cash ACGBs are 3-4bps richer after the data and 9-10bps richer on the day.
• The AU-US 10-year yield differential is 4bps lower at -8bps versus a pre-data level of -4bps.
• Swap rates are 9-10bps lower on the day.
• The bills strip has bull-flattened, with pricing +1 to +11.
• RBA-dated OIS pricing is 3-8bps softer after the data, with a cumulative 36bps of easing is priced by year-end.
• (AFR) CBA boss Matt Comyn says the Reserve Bank may not cut interest rates until early 2025 because of “persistent” inflation, compounding cost of living pressures for borrowers counting on tax cuts and mortgage relief. (See link)