Daily Flows

• The recent Macquarie Subordinated launch is trading at a premium, with offers in the 5.50% YTC and above in the market.
• Stronger-than-expected employment data drove the yield curve up 5-10 basis points for 1 to 5-year maturities.
• The NCD market remains quite liquid, with minimal new issuers coming forward.

Job Market Tightness Here to Stay

• The jobs market continues to defy tight monetary policy conditions and cost pressures, with employment rising by 64.1K in September.
• This marks the sixth consecutive month that jobs growth has exceeded expectations, with annual employment growth running at 3.1%, above the working-age population growth of 2.5%, but below the labour force growth rate of 3.6%.
• Unemployment was forecast to come in at 4.2%, but remained steady at 4.2%.
• This data confirms most economists’ view that a rate cut is unlikely anytime soon.
• The economy is tracking well, and we are still operating in a tight labour market. Under these conditions, it’s hard to expect anything other than a hold from the RBA.