Softer US Jobs Data Eases Yields as Focus Shifts to Aussie Balance of Trade

• In the US, labour data came in a touch softer, with ADP payrolls rising just 22k, this caused the 2-year treasury yield to fall to 3.55%, while the 10-year held near 4.28%.
• Geopolitical tensions remain in the background as US-Iran talks faltered, though market reaction was modest, yields were slightly lower overall as uncertainty still remains.
• Domestically, markets continue to absorb the RBA’s recent rate hike and reassessment of the local policy path.
• Markets continue to price in a 67% chance of a hike in May, with the RBA’s hawkish tone and SOMP forecasts fuelling this narrative.
• Attention now turns to today’s trade balance data, where another narrowing in the surplus would add to the mixed picture for domestic growth momentum.