Fed Rate Cut Expectations Pared Back

• Locally, job vacancies slipped 2.7% to 327,200, taking them back to levels last seen six months ago. On an annual basis they’re just 1.5% lower, pointing to labour demand that remains elevated but is softening only gradually.
• US data beat expectations, with Q2 GDP revised up to 3.8% annualised (from 3.3%) on stronger household consumption. Personal spending was also lifted to 2.5% q/q from 1.7%, underscoring resilient domestic demand.
• Bond yields pushed firmer, with the 2yr up 6bp to 3.66% and the 10yr edging 2bp higher at 4.17%. Futures now price 22bp of Fed cuts for the next meeting and 39bp by year-end, a slight pullback from the levels seen the day before.
• Focus now turns to tonight’s PCE inflation release (10:30pm Sydney), with core PCE expected to rise by 0.2% m/m, a key print for gauging the Fed’s next steps.