Local Jobs Data as Yields Ease

• Australian markets turn to April labour force data today, with consensus looking for employment growth of around 15k and the unemployment rate to hold at 4.3%. A broadly in-line print is unlikely to shift the RBA’s near-term focus.
• The RBA remains tilted toward further tightening, though markets are unsure whether the Bank will follow up immediately after the recent rate rise. Futures imply around a 15% chance of a hike by June and a 70% chance by August.
• Global yields fell as oil prices eased on reports the US and Iran are in the final stages of negotiations. The US 10-year Treasury yield declined 9bp to 4.58%, reversing part of the recent sell-off as fears around a prolonged Strait of Hormuz disruption moderated.
• Fed minutes from the April meeting leaned hawkish, with many participants noting inflation could take longer to return to 2%. The minutes also left the door open to further policy firming and markets have moved back toward pricing a possible Fed hike by year-end.