Sydney: Australia’s jobless rate dropped to a seven-month low and employment figures blew past forecasts in December, prompting markets to now factor in a more than 50% chance of an interest rate hike next month. The Australian dollar gained 0.4% to reach a 15-month peak of $0.6791, while three-year government bond yields hit a 14-month high of 4.227%.
Investors currently see a 53% chance of a rate hike from the Reserve Bank of Australia on February 3, compared with 29% before the data. “We’re now closer to an RBA rate rise,” said Russel Chesler, head of investments & capital markets at VanEck. “While it’s good news that Australians are fully employed, this is another indicator of a robust economy and inflation levels that are still too high for the RBA.”
