Australia’s 10-year bond yield fell by 7bps to 4.16%, hitting its lowest level since early July after a weaker-than-expected jobs report supported the case for a near-term interest rate cut. The unemployment rate rose to 4.5% in September, the highest in nearly four years and above market expectations of 4.3%. Total employment increased by 14.9 thousand from the previous month, but it fell short of forecasts for a 17 thousand gain. This prompted investors to raise the probability of a November rate cut by the Reserve Bank of Australia to 76%, from below 50% prior to the data release. The weak result contrasts with earlier comments from RBA Governor Michele Bullock, who noted that the labor market was “possibly a bit tight” and that, along with higher-than-expected inflation, the central bank was weighing whether further easing would be necessary.
