Daily Flows & Insights – Labour Market Continues to Show Strength

Daily Flows

  • With a stronger than expected labour market print, reference rates rose yesterday.
  • Offerings of 5.55% for 1 year term deposit are becoming more available in the BBB space as 1 year Aussie swap reached 4.60%.
  • Outright 3 month NCD levels are reaching 4.74% as 3 month BBSW has risen off the back of an unexpected RBA hike.
  • 3 month NCD levels may touch 4.80% as 3 month BBSW has climbed a further 6 basis points today.

Labour Market Continues to Show Strength

  • Yesterday domestic employment data came in stronger than expected.
  • Total employment rose by 75.9K from last months print of -4K.
  • The unemployment decreased from 3.7% to 3.6% and participation rate rose to 66.9% from 66.7%.
  • Whilst this print does indicate that the labour market is still tight, caution should be taken when interpreting these results.
  • The April 2023 print conceded fully with the Easter holidays as opposed to a partial overlap.
  • This has only occurred three times over the last 20 years.
  • Each time, jobs growth displayed a pattern of softness in April followed by a pick up in May.
  • Even with this in account the labour market is still running tight and will be an area of concern for RBA as they try to tame inflation.
  • Off the back of the print there was a 5-10 basis point pick up in reference rates as the market priced in more restrictive monetary policy.
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Curve Team
Jack Pedersen