Free Trial

Yields Shunt Higher With US Tsys Following Payrolls’ Upside Surprise

AUSSIE BONDS

ACGBs (YM -11.0 & XM -11.5) are sharply weaker after US tsy yields shunt higher following a much stronger than expected Nonfarm Payrolls print: Change +353k vs +185k est. (prior up-revised to +333k from 216k), Private Payrolls surge to +317k vs +170k est. The Unemployment Rate was 3.7% vs 3.8% est., while the Labour Force Participation Rate was near steady at 62.5% vs 62.6% est.

  • The 2-year US tsy yield shunted 16bps higher to 4.36%, with the 10-year yield increasing by 14bps to 4.02%, marking a sharp reversal from the 2024 low of 3.81%, seen in the lead-up to the FOMC.
  • The implied probability of a 25bp rate cut in March has been scaled back to around 20%.
  • Cash ACGBs are 10-11bps cheaper, with the AU-US 10-year yield differential 2bps tighter at +7bps.
  • Swap rates are 10-11bps higher.
  • The bills strip has bear-steepened, with pricing -3 to -11.
  • RBA-dated OIS pricing is 6-11bps firmer for meetings beyond March. A cumulative 53bps of easing is priced by year-end.
  • January Judo Bank PMIs print: Services (49.1 from 47.1 in Dec) and Composite (49 from 46.9 in Dec).
  • Today, the local calendar will also see MI Inflation Gauge, Trade Balance and ANZ-Indeed Job Advertisements. The week’s highlight will however be the RBA Policy Decision tomorrow.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.