NZD: NZD/USD - Grinds Back Above 0.5600 As Risk Surges Higher

SEEK data show that labour demand improved over Q3 while supply remains positive it slowed. With Q3 employment rising only 0.2% q/q down from Q2’s 0.6%, SEEK job ads may be signalling some possible improvement over Q4. A stabilisation of the labour market would be helpful for monetary policy decision makers if inflation prints to the upside.

Australia SEEK job ads %

• September SEEK new job ads rose 1.1% m/m, the third straight monthly increase. Ads increased 1.7% q/q in Q3 a clear pick up after Q2’s 0.6% q/q contraction. They are still down 2.4% y/y in September but that follows -12.6% y/y in March and is the best result in almost three years.
• Applicants per job were little changed in August rising 0.1% m/m and 10.9% y/y following July’s 2.8% m/m & 11.7% y/y. It seems that growth in labour supply slowed in Q3 after rising 4% q/q in Q2. In Q3, the labour force grew 1.8% y/y while employment was up 1.5% y/y.
• SEEK noted that a number of large industries had increased job ads including trades & services, manufacturing and transport & logistics. Professional and financial services continue to decline. 

Australia SEEK applicants per job 2013=100

Source: MNI - Market News/SEEK

JGB futures are stronger, +16 compared to the settlement levels, but off session bests.

• Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session after yesterday's gains.
• Cash JGBs are slightly richer across benchmarks, with yields 1-2bps lower. The benchmark 10-year yield is 1.0bp lower at 1.664%, outperforming the futures-linked 7-year. This continued the recent trend, which has unwound the relative cheapening of the 10-year earlier in the year.
• Japan sold ¥300bn of 10-year climate transition notes at a cut-off yield that was lower than expectations, signalling lacklustre investor demand. The cut-off yield was 1.680%, compared with 1.695% estimated by traders in a Bloomberg survey. The bid-to-cover ratio was 3.56x, compared with 3.31x in October 2024, the last time the government sold the bonds.
• Swap rates are little changed.
• BOJ-dated OIS pricing is little changed across 2025 meetings compared to early August levels. Pricing is, however, firmer for 2026 meetings out to July. Current OIS pricing implies just a 24% probability of a 25bp hike in October, rising to 65% by December and 82% by January. A full 25bps hike is not fully priced until March 2026. (see chart)
• Tomorrow, the local calendar will see Trade Balance data.

Figure 1: BOJ-Dated OIS – Today Vs. August 1

Source: Bloomberg Finance LP / MNI 

Having finished the overnight US session modestly higher, US Treasury futures failed to follow on with TYZ5 remaining where it opened at 113-19 and USTs moves modest at best.  

• The US 2-Yr did very little during the Asian trading day, trending marginally higher to 3.46%
• The US 5-Yr had finished -2bps lower at 3.57% during the US trading day where it remained.  
• The US 10-Yr slipped back below the 4.00% overnight, finishing at 3.98% where it has held during the day today with eyes on it overnight to see if it can consolidate below 4.00%.  
• The USD 30-Yr was strong overnight rallying 3bps to 4.57%, and continued on in Asia down again to 4.56% The 30-Yr is now back at levels of April.

The key data releases tonight are the Philadelphia Fed Non-Manufacturing Activity, Redbook retail sales and MBA Mortgage Applications.