CHINA: Bond Futures Steady as Equities Rebound

SELL 3500 of FVZ5 traded at 109-05, post-time 13:53:36 AEDT (DV01 $149,331). The contract is currently trading at 109-05, +0-01 from closing levels.

Interest rate expectations in Australia out to mid-2026 have firmed just shy of 10bps over the past week, with October’s employment data as the key driver

• The labour market normalised, with unemployment returning to 4.3% after September’s 4.5% spike. Employment rose 42.2k (all full-time) following 12.8k in September.
• OIS pricing now implies just a 1% probability of a 25bp December cut (9% pre-data), with cumulative easing of 9bps priced by mid-2026 (down from 17bps pre-data).
• Even still, as previously noted, markets may still be overestimating the likelihood of further cuts, given that rising annual inflation has historically ended RBA easing cycles.

Figure 1: RBA-Dated OIS – Current Vs. Pre-Jobs

Source: Bloomberg Finance LP / MNI

*JAPAN INFLATION BOND SALE MAY HAVE 98.80 LOWEST PRICE: POLL - BBG