Strong Jobs Report Kills RBA Cut Hopes, Australian Dollar Jumps 

A surprisingly strong October jobs report effectively eliminated any prospect of a December rate cut by the Reserve Bank of Australia, causing the Australian dollar to rally and local shares to fall to a three-month low.

The data delivered a powerful shock to market expectations. Australia’s unemployment rate dropped to 4.3% in October, significantly beating the 4.4% forecast and falling from the previous month’s 4.5% figure. Crucially, job gains doubled expectations, and a surge in full-time hiring underpinned the strength. Westpac analysts commented that the job rebound lets the RBA look past any September weakness and stay inflation-focused. Analysts now push out expectations for RBA easing well into 2026.

Strong Jobs Report Kills RBA Cut Hopes, Australian Dollar Jumps 

In other key developments, US Congress passed legislation to reopen the federal government after the longest shutdown in US history, and President Trump soon signed the bill. The White House confirmed the delayed September BLS data will release now that agencies have reopened.

Meanwhile, Bank of Japan Governor Ueda reiterated his commitment to act if long-term yields move out of line with fundamentals, even as Japan’s wholesale inflation slowed to 2.7%. Ueda told parliament that underlying inflation is “gradually accelerating” toward the 2% target.

A USD/JPY surge above 155 briefly heightened intervention risk for the currency, although it later eased back. On the other side of the globe, Macquarie made an out-of-consensus call, predicting China will see 5% growth in 2026 on strong exports.

US markets saw another mixed day as a rotation out of technology stocks and into Dow stocks continued. Boston Fed President Susan Collins reinforced a cautious tone among Federal Open Market Committee (FOMC) members, stating she sees a “relatively high bar” for any near-term additional easing, citing stubborn price pressures.

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