Thursday's data showed employment rose 14,700 in September, much as expected, while full-time jobs increased by a healthy 26,200. That helped nudge the jobless rate down a tick to 5.2%, when analysts had expected it to hold at a one-year high of 5.3%. The futures market reacted by trimming the probability of a November rate cut to around 20%, down from 34% at the start of the week, while December was put at 60%.

The 10-year contract also eased 2 ticks to 98.930, implying a yield of 1.07%. Yields on New Zealand government bonds rose 1 to 2 basis points across the curve. The Reserve Bank of Australia (RBA) has already cut rates three times this year to an all-time low of 0.75%, arguing more stimulus was needed to drive unemployment down.

Analysts noted the jobless rate was still some way from the RBA's goal of around 4.5% and leading indicators of labour demand, such as vacancies, had softened recently. "We think this month's modest decline in the unemployment rate will be temporary and emphasise we are still a long way away from the RBA's full employment aim," said Westpac economist Simon Murray.

Copyright Reuters, 2019