Markets Brace for Non-Farm Payrolls

• Attention turns offshore tonight to US labour market data, with non-farm payrolls released for October and November, while the unemployment rate update reflects November only.

• China’s latest activity data came in soft, with November retail sales rising just 1.3% y/y versus 2.9% expected, while year-to-date fixed asset investment remained in contraction at –2.6% (vs –2.3% forecast), reinforcing concerns around demand momentum.

• Global bond markets saw a modest rally, though moves in yields were contained. Markets continue to price roughly two Fed rate cuts through next year.

• Fed Governor Stephen Miran maintained his dovish tone, arguing policy settings remain overly restrictive and pointing to easing shelter inflation and a cooling labour market as reasons inflation risks may be overstated.

• At home, Australian yields are holding near recent highs as markets assess the risk of rate hikes next year, with the 10-year government bond trading above 4.70%.