The yield on the 10-year Australian bond yield fell by two basis points to 0.87% after data released at 01:30 GMT showed the Aussie jobless rate ticked higher to 7.4% in June as expected and full-time jobs growth tanked.
The economy added 210.8K jobs in June compared to expectations for 112.5K additions, having shed 227.7K jobs in May. However, the better-than-expected headline figure lost its shine due to dismal details, which showed the full-time jobs fell by 38.1K following an 89.1K drop in May.
The decline in full-time jobs shows the economy is unlikely to return to pre-coronavirus levels anytime soon. As such, the RBA will likely keep the policy accommodative for a prolonged time. The RBA, in its July meeting, made it clear that rates would remain low until progress is made towards full employment and inflation is within the 2%-3% target.
At press time, the 10-year yield is seen at 0.88%. Meanwhile, the spread between the 10- and two-year yields is seen at 62 basis points compared to around 49 basis points in the U.S. and just 18 basis points in Japan. Essentially, Australia has the steepest yield curve among advanced economies and that is turning Australia into a carry trade haven, according to Bloomberg.