Australian bonds climb despite higher-than-expected rise in December employment change; jobless rate cheers investors

Australian government bonds climbed across the curve during Asian trading session Thursday despite a higher-than-expected rise in the country’s employment change for the month of December, while unemployment rate cheered market investors, falling, unexpectedly to consensus estimate.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1-1/2 basis points to 2.271 percent, the yield on the long-term 30-year bond slumped 2-1/2 basis points to 2.784 percent and the yield on short-term 2-year also traded nearly 2-1/2 basis points lower at 1.865 percent by 03:50 GMT.

Australian labour market is continuing to go from strength to strength. Jobs grew a solid 21.6k in December. Moreover, December’s result followed solid outcomes in the two month’s prior. Over the past three months, jobs gains averaged 29.1k per month.

The economy added 269 jobs over 2018.  It was down on the over 400k net jobs created over 2017, but it is still a firm increase in jobs. Importantly, the strength of job gains has been sufficient to bring down the unemployment rate to 5.0 percent in December from 5.6 percent a year ago.

Some of the detail took some shine out of the report. December’s job gain was entirely driven by part-time work, which rose 24.6k. Meanwhile, full-time jobs fell 3.0k, dropping for the second consecutive month. It was the first back-to-back decline in full-time jobs in just over two years.

"However, we expect some moderation in job growth given downside risks to the economy from falling dwelling prices and greater uncertainty from the global economy," St. George Economics commented in its latest report.

Meanwhile, the S&P/ASX 200 index traded 0.11 percent higher at 5,796.50 by 03:55GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -33.36 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex