Australia Government Bond 3Y

The Australian Bureau of Statistics reported that the unemployment rate rose to 4.5% in July, higher than analysts' expectations for it to hold steady at 4.4%. Employment fell by 15,800 positions, against expectations for an increase of 12,000. Full-time employment rose by 16,300 positions, while part-time employment fell by 32,200. The labour force participation rate edged down to 66.9% from 67% in June, and the employment-to-population ratio fell 0.2 percentage points to 63.9%. The data support the Reserve Bank of Australia's view that the labour market will cool gradually, and led investors to scale back expectations for interest rate increases. After the release, the Australian dollar weakened 0.3% and the three-year government bond yield fell 0.04%, while investors lowered the probability of an RBA rate hike at the December meeting to around 60% from 68% previously. At its meeting on 11 August, the RBA board kept the policy rate unchanged at 4.35%, the second consecutive hold, saying higher unemployment and a weaker property market would cool economic activity enough to slow inflation.