...markets may have been too optimistic about a rate cut by RBA next week.
...employment holding up along with the US-China trade truce could give cause for RBA to hold fire. Employment jumps 89,000 in April; $A climbs
Sarah Jones
The number: Australian employment climbed 89,000 in March, following an increase of 32,200 the previous month. The unemployment rate held at 4.1 per cent. Consensus was for 20,000 jobs created and the jobless rate to hold at 4.1 per cent. Why it matters: This is the last key piece of economic data before the Reserve Bank of Australia meets next week. The labour market is a key component of inflation and the central bank has noted the surprising resilience of the employment figures. What has changed: The RBA held the cash rate at 4.1 per cent in April just before the Trump administration announced a wave of reciprocal tariffs that triggered turmoil in financial markets. A recent trade truce between China and the US has since prompted money markets to dial back the number of rate cuts in Australia to three by the end of the year.
What next: The RBA is due to kick off its two-day board meeting on May 19.
$A, bond yields rise as traders pare back RBA rate cuts after strong jobs
Cecile Lefort
The Australian dollar jumped to US64.52¢, from US64.36¢ after a strong employment report. Bond yields rose two basis points with the 3-year rate at 3.70 per cent, the highest since early April. The 10-year edged up to 4.58 per cent.
Bond traders have dialled back on expectations of a rate cut by the Reserve Bank next week. They now imply an 87 per cent chance of a reduction in the cash rate to 3.85 per cent, from 95 per cent before the data.
Money markets ascribe a total of 73 basis points of easing by Christmas, from 77 basis points before the data.
