US Jobs Miss Complicates Fed Rate Path

• Risk sentiment softened heading into the weekend as tensions in the Middle East escalated. Oil surged above US$90 a barrel amid disruption to shipping through the Strait of Hormuz and little sign of progress toward easing the conflict.
• In the US, labour market data surprised on the downside. February payrolls fell by 92k, against expectations for an increase, with downward revisions of 69k across the previous two months.
• The weaker employment reading shifted rate expectations, reinforcing the view that the Federal Reserve may need to move earlier on rate cuts, even as higher energy prices complicate the inflation outlook.
• US yields moved lower in volatile trading, with the 10-year Treasury around 4.14% and the 2-year near 3.55% by the close.
• Locally, attention this week turns to the Westpac Consumer Confidence survey and the NAB Business Survey on Tuesday, which should provide a clearer sense of how the RBA’s recent hawkish messaging is feeding through to households and businesses.