Daily Flows

• Today, Suncorp launched 3- and 5-year bonds with initial coupons indicated at +77 and +95 basis points.
• Yesterday, we saw flows directed towards short-dated semis, with market participants opting for NSW Treasury FRNs maturing in 2027, offering a coupon of +55 basis points.
• In the NCD space, those investing in the 6-month period were able to secure an outright yield of 5.00%.

Strong Jobs Data Encourages RBA Hawkishness

• In August, employment rose by 47.5k (+0.3%), surpassing expectations and continuing its robust growth trend. The unemployment rate held steady at 4.2%, though a slight drop in the number of unemployed hinted at a potential shift to 4.1%.
• The participation rate remained steady at 67.1%, with the labour force expanding by 37k, slightly lagging behind job growth. Gains were primarily driven by part-time positions, while full-time employment was unchanged.
• Underemployment edged up from 6.3% to 6.5%, indicating a gap between labour supply and demand. Despite this, the labour market remains strong, though disparities are emerging between essential services and sectors like retail and manufacturing.
• This data will reinforce the RBA’s current hawkish stance, further dismissing the possibility of a rate cut anytime soon.