- Aussie bonds picked up a bid, sending yields to record lows after post-Aussie jobs data.
- Both 10- and two-year yields hit record lows.
The yield on Australia’s 10-year government bond yield fell to a record low of 1.64% soon before press time, possibly in response to an uptick in Australia’s jobless rate.
The official data released at 01:30 GMT today showed Australia’s jobless rate ticked higher to 5.2% in April following an upwardly revised 5.1% rise in March.
While the headline Employment Change figure bettered estimates by a big margin with 28.4K print, the Full-Time jobs fell by 6.3K, putting a question mark on the quality of jobs growth.
All-in-all, the labor market lost steam in April. As a result, markets may now price in a higher probability of RBA slashing rates by 25 basis points in June. The probability currently stands around 40%.
The yields, therefore, could slip to new records lows over the next few weeks.
As of writing, the 10-year yield is seen at 1.66%. Meanwhile, the two-year yield, which is more sensitive to short-term rate interest rate expectations, is currently trading ar 1.24 – down 5.2 basis points on the day – having hit a record low of 1.22% earlier today.