FX.co ★ Australia 10-Yr Yield Climbs After Upbeat Jobs Data

Australia's 10-year bond yield has surged to 4.45%, marking a peak not seen since May, driven by unexpectedly robust employment data. October saw employment rise by 42,200, a figure that significantly overshot forecasts of a 20,000 increase and dwarfed September's 12,000 gain. This growth was bolstered by a notable uptick in full-time job positions. The unemployment rate decreased to 4.3% from 4.5%, slightly surpassing expectations which suggested a 4.4% rate. These figures underscore the persistence of a tight labor market, leading to a steep reduction in market expectations for monetary easing by the Reserve Bank of Australia in the coming year. The likelihood of a rate cut in May has diminished sharply to 25%, down from almost 70% before this data release. Complementing this, recent signs of economic resilience have been observed, such as a significant recovery in consumer confidence and a spike in new housing loans. In contrast, RBA Deputy Governor Andrew Hauser noted on Wednesday that there remains an active discussion on whether the current cash rate of 3.6% is adequately restrictive to curb inflation.