TD Securities’ Global Strategy Team argues the Reserve Bank of Australia will view January’s labour data as confirmation of a still-tight market. Full-time jobs rose strongly and unemployment stayed below the RBA’s latest forecast. The bank expects the next RBA rate hike in May, a view that should support a flatter Australian curve outlook.

Strong jobs keep tightening bias alive

"The RBA will look at the Jan job report as confirmation that the labour market remains tight."

"While the headline came in at +17.8k, below consensus at +20k, full time jobs rose a healthy +50.5k and the unemployment remained at 4.1%, vs consensus at 4.2%."

"To be precise, the unemployment rate was 4.075% vs Dec at 4.092% and Nov at 4.303% and the Jan u/e outcome is tracking below the RBA's Feb SoMP forecast."

"Along with the mild upward revisions to the Dec data across headline, full time and part time, the question really is when does the RBA hike next?"

"We think May and this should bias the curve flatter."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)