Unemployment Matches Market Expectations

• Australia’s unemployment rate edged down to 4.2% in July (consensus 4.2%; prior 4.3%), with employment rising 24.5k (consensus 25k).
• The data points to a still-solid labour market, leaving the RBA under little pressure to ease in September. Markets now price a 30% chance of a 25bp cut from the current 3.60% cash rate at the 30 September meeting.
• In the US, July’s producer price index (PPI) rose 0.9% m/m (survey: +0.2%), pushing annual growth to 3.3% from 2.3% (survey: 2.5%).
• US Treasury yields moved higher as traders pared back Fed cut expectations for September, with the 10-year up 5bp to 4.29%.