AUSTRALIA DATA: Q3 Data Show Stabilisation, Underemployment Still Trending Down
While the headline employment and unemployment rate numbers get most of the attention, the RBA looks deeper and monitors underemployment, youth unemployment, hours worked, vacancies, the quit rate and labour shortage measures closely. Governor Bullock was also clear that given the data’s volatility, it focuses on the quarterly averages. While August employment and hours were disappointing, other variables signalled that the labour market remains solid.
- The underemployment rate continued to trend lower falling 0.1pp in August to 5.7%, the lowest since 1991. The Q3 average to date is down 0.1pp to 5.8%. The 2024 average was 6.4%. Q3 average of the unemployment rate was in line with Q2 at 4.2%.
- Q3 employment is up 0.2% q/q to date, a slowdown from Q2’s +0.6% q/q but in line with Q1’s +0.3% q/q.
- The youth unemployment rate was stable at 9.7% in August but the Q3 average is 0.1pp higher than Q2. It is of interest as it can lead the broader labour market.
Australia unemployment rate 15-24 years %
- Hours worked fell 0.4% m/m in August driven by a 0.9% drop in full-time (FT). Q3 is down with both FT and PT down 0.1% q/q.
- SEEK new job ads rose for the second straight month in August to be down 3.4% y/y with 3-month momentum picking up to its fastest in just over 3 years. Internet vacancies to unemployed stabilised in July.
Australia SEEK new job ads 2013=100
Source: MNI - Market News/SEEK
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JGBS AUCTION: 20Y Supply Faces A Yield & A Curve Near Cyclical Highs
The Japanese Ministry of Finance (MoF) will today sell Y800bn of 20-Year JGBs. The MoF last sold 20-year debt on 10 July 2025.
- Today’s 20-year JGB auction offers an outright yield near its cycle high, 10bps above last month’s level.
- Moreover, the 10/20 yield curve remains near its recent high, its steepest since 1999.
- The 20-year JGB is at a similar valuation to last month in terms of the 10/20/30 butterfly.
- On the other hand, the auction comes amid a slight improvement in sentiment toward long-term global bonds.
- Given these dynamics, it remains to be seen whether today’s supply can generate some positive momentum for JGB auctions or if market caution will weigh on demand.
- Results are due at 0435 GMT / 1235 JT.
JGBS AUCTION: Poll: 20-Year JGB Auction
*JAPAN 20Y GOVT BOND AUCTION MAY HAVE 98.85 LOWEST PRICE:POLL – BLOOMBERG
JGBS AUCTION: PREVIEW - 20-Year JGB Auction Due
The Japanese Ministry of Finance (MoF) will today sell Y800bn of 20-Year JGBs. The MoF last sold 20-year debt on 10 July 2025, the auction drew cover of 3.1462x at an average yield of 2.482%, an average price of 100.23, a high yield of 2.496%, a low price of 100.05, with 20.3084% of bids allotted at the high yield.
- Last month’s 20-year JGB auction showed mixed results across key metrics. The low price underperformed dealer forecasts, which were set at 100.10 according to a Bloomberg poll. However, the cover ratio increased to 3.1462x from 3.1070x in the previous auction and the auction tail shortened to 0.18 from 0.28.
- Today’s auction also comes on the heels of mixed demand metrics observed in this month’s 30-year JGB auctions. The low price aligned with dealer expectations of 95.35, per the Bloomberg survey. However, the cover ratio dipped to 3.4297x from 3.5796x. On the other hand, the auction tail shortened significantly to 0.15 from 0.31, indicating an improvement in bidding strength.
- Results are due at 0435 BST / 1235 JT.
