Daily Flows & Insights – Labour Market Holds Firm Despite Employment Dip

Daily Flows

  • An A-2/BBB+ green-friendly name is offering 4.35% for 9 months, top of the market for this tenor, with limited capacity expected.
  • Rabo Bank continues to lead across the long end, with 4- and 5-year TDs pricing around 25 points above the next best in the market with 4.65% their best rate.
  • Heading into EOFY, some ADIs are looking to fill final funding gaps. With many councils still active, this has prompted sharper pricing and stronger competition across the curve.

Labour Market Holds Firm Despite Employment Dip

  • Australia’s May labour force survey was mixed. Employment fell by 2.5k (consensus: +21.2k), a modest pullback after April’s 87.6k surge.
  • The participation rate eased to 67.0%, keeping unemployment steady at 4.1%. This result is broadly neutral for the RBA ahead of its July 8 meeting.
  • The unemployment rate has now averaged 4.0–4.1% since March 2024, reinforcing the view of a stable, yet cooling, labour market.
  • Markets are currently pricing in a 77% chance of a rate cut in July, with next week’s monthly CPI indicator now the final key input for the RBA’s decision.
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Curve Team
Jack Pedersen