- Australian employment unexpectedly fell 39.3k in September, with the unemployment rate rising to 4.7%, a five-year high. The labour market continues to gradually loosen, with the rise in unemployment now coming from slower hiring rather than labour force growth.
- This sharpens the inflation-growth trade-off for the RBA, though the risk of another hike remains, with markets pricing only 20bps of further tightening, a terminal rate of 4.80% and less than a full hike over the next year.
- US Treasuries led a global bond rally overnight as investors sought safe haven assets, with the 10yr down 11bps on the day to 5.07%, 25bps below its midweek highs and its lowest level in several weeks.
- US PPI beat consensus, rising 1.3% m/m in September. While energy was a major driver, the result still points to upward pressure on PCE. Despite Fed Chair Warsh’s aversion to forward guidance, markets will be watching for any insight when he speaks in Bangkok later today.
