Slightly Cheaper, US Payrolls Showed Mixed Results On Friday

In roll-impacted trading, ACGBs (YM -1.2 & XM -1.4) are slightly cheaper after US tsys finished marginally richer ahead of the weekend. The US 2-year yield declined initially to 4.40% from 4.49% following the US Employment Reports, before closing 3bps lower at 4.47%. The 10-year yield finished 1bp lower at 4.07%.

• US tsys gapped lower on the higher-than-expected jobs gain of 275k vs. 200k est. but reversed course just as quickly as markets digested the large down revisions to January (229k from 335k, private to 177k from 317k).
• The unemployment rate surprisingly increased two-tenths from 3.66% to 3.86% (cons 3.7), poking above October’s 3.84 for the highest since Jan’22. The FOMC eyes 4.1% for end-2024.
• The February CPI report on Tuesday is the last key data point ahead of the March FOMC meeting.
• Today Treasurer Chalmers stated that he sees ‘big pressures’ coming in the budget medium term. Efforts at meaningful repair of the budget are still ongoing.
• Cash ACGBs are flat to 1bp richer, with the AU-US 10-year yield differential 1bp lower at -11bps.
• Swap rates are 1bp higher.
• The bills strip are slightly richer, with pricing flat to +1.
• RBA-dated OIS pricing is flat to 2bps softer across meetings. A cumulative 46bps of easing is priced by year-end.
• Today, the local calendar is empty.