Richer, US Yields Lower After US Payrolls

ACGBs (YM +4.0 & XM +4.0) are richer after US tsy yields declined following weaker-than-expected labour market data led by the front end. The 10-year yield fell 8bps to 4.28%, ending the week at the yield lows. The 2-year finished 10bps richer at 4.60%, the lowest since late March.

• US tsy yields briefly gapped higher in response to mildly higher than expected June jobs gain of +206k vs. +190k est -- but quickly reversed course, extending session lows after prior jobs data was down-revised. Two-month -111k, split evenly over May and April. Private sees surprises lower though, 136k (cons 160k) and a -86k two-month revision skewed slightly to April.
• The NASDAQ and S&P 500 hit fresh all-time highs and closed near the day's peaks.
• Cash ACGBs are 4bps richer, with the AU-US 10-year yield differential at +8bps.
• Swap rates are 5bps lower.
• The bills strip has bull-flattened, with pricing +1 to +5.
• RBA-dated OIS pricing is 1-4bps softer across meetings. Terminal rate expectations decline by 2bps to 4.47%.
• Today, the local calendar will see Home Loans data ahead of Consumer and Business Confidence tomorrow.
• The AOFM plans to sell A$700mn of the 3.75% 21 May 2034 bond on Wednesday and A$800mn of the 2.75% 21 November 2029 bond on Friday.