Daily Commentary BY THE CURVE TEAM –

Daily Insights – Payrolls Hold up

22nd of October, 2021

Payrolls Up

  • For the last two weeks of September, they were up 0.2%.
  • For September they are still down 0.4%.
  • NSW was up 0.9%, which shows a rebound on imminent reopening.

Quarterly Business Survey

  • Held up remarkably well despite lockdowns over the Q3 survey period.
  • Conditions are at 13, down from 30.
  • Confidence is -1 from 18, which considering numerous businesses across the state were either shut or impacted by lockdowns, is still strong.
  • Purchases costs rose to 1.1% from 0.9% in Q2 and final product prices ticked up to 0.7% from 0.6%.

RBA Loss

  • The overall loss was $4.3 billion, with unrealised valuations were the driver.
  • Underlying earnings were $4.2 billion but unrealised valuation losses were $8.2 billion.
  • Higher yields decreasing the value of bonds (which the RBA hold in droves from QE) and an appreciating Australian dollar decreased the value of the assets held by the RBA.
  • However, this does “not change the ultimate return the Bank will earn on these bonds”, as they intend to be held to maturity.

T Notes Back Positive

  • The April issue had a positive bid of 0.03%. It also accepted negative bids.
  • The January issue had a highest bid of 0% and other bids were negative.
  • It is the first issue that has had a positive bid for over 2 months.

Josh Stewart

Associate - Money Markets