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Australian bonds slump after September jobless rate cheers investors; lower-than-expected employment change limits losses

Australian government bonds slumped during Asian session Thursday after the country’s unemployment rate for the month of September surprisingly cheered market expectations. However, the lower-than-expected employment change limited further losses in debt prices.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 2.748 percent, the yield on the long-term 30-year bond surged 3-1/2 basis points to 3.219 percent and the yield on short-term 2-year too traded 3-1/2 basis points higher at 2.075 percent by 03:35GMT.

Another strong labour market report for September saw the unemployment rate drop to a six-year low of 5.0 percent, well below the RBA’s forecast of 5-1/2 percent for year end. Employment rose a modest 5.6k in September, vs market expectations of after the 44.0k jump in August. The strength was concentrated in full-time jobs (+20.3k), while part-time jobs fell (‑14.7k).

"We expect that the RBA will lower its unemployment forecasts in the November Statement on Monetary Policy (SoMP), although the implications for its wages and inflation forecasts are less clear-cut," ANZ Research commented in its latest report.

Meanwhile, the S&P/ASX 200 index traded 0.13 percent higher at 5,913.0 by 03:40GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at 153.39 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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November 16 21:00 UTC Released

UST Flows,Incl.Swaps

Actual

16.7 Bln USD

Forecast

Previous

111.5 Bln USD

November 16 21:00 UTC Released

USOverall Net Capital Flows

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-29.1 Bln USD

Forecast

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108.2 Bln USD

January 31 00:00 UTC 417740417740m

ARAnnual Primary Balance*

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 417740417740m

ARAnnual Primary Balance*

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2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 429560429560m

ARTrade Balance

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Previous

-1541 %

January 31 00:00 UTC 417740417740m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 429560429560m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 417740417740m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 417740417740m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 417740417740m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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