Aussie shares, dollar slide as US rate-cut odds dim

The Australia share market is on track for its third day of losses after a blockbuster US jobs report led to a rethink on how quickly the Federal Reserve would act to cut interest rates.

At noon AEDT on Monday, the benchmark S&P/ASX200 index was down 73.9 points, or 0.89 per cent, to 8,220.2, while the broader All Ordinaries had dropped 79.8 points, or 0.93 per cent, to 8,463.9.

The US Labor Department reported late on Friday that US non-farm payrolls rose 256,000 in December, far more than the 165,000 that economists were expecting. The unemployment rate ticked lower as well.

"The strong jobs report reaffirming the US economic exceptionalism narrative and shifting the base case for the US Fed to (take) an extended pause," wrote Westpac economist Jameson Coombs in an analysis.

The market's consensus expectations now give less than 10 per cent odds that there'll be more than one US rate cut in 2025, according to the CME Fedwatch Tool.

That repricing lifted the US dollar to a two-year high against a basket of other currencies, sending the Aussie to a nearly five-year low.

Nine of the ASX's 11 sectors were lower at midday, with utilities up 0.4 per cent and energy climbing 1.7 per cent.

The tech sector was the biggest loser, falling 2.4 per cent as Wisetech Global dropped 2.5 per cent and Life360 retreated 3.5 per cent.

The financial sector had dropped 1.9 per cent, with all of the big four banks down sharply.

Westpac had dropped 2.1 per cent, NAB had retreated 2.0 per cent, ANZ had fallen 1.6 per cent and CBA was down 1.9 per cent.

In the consumer discretionary sector, both Myer and Premier Investments had plunged by double digits after issuing trading updates.

Myer was down 18.8 per cent to a two-month low of 93c after the department store chain said its sales were down 0.8 per cent in the 22 weeks to December 28.

"Trading during last year's key sales events including Black Friday was strong, but consumers remain cautious and focused on value given persistent cost-of-living pressures," said Myer executive chair Olivia Wirth.

Premier was down 15.4 per cent to $27.95 after the Smiggle, Just Jeans and Peter Alexander owner also reported soft sales in recent months.

"Retail conditions have remained challenging through 1H25 with customers continuing to experience cost of living pressures across all of Premier Retail's global markets and having a strong focus on value," the company said.

Back in the financial sector, Insignia Financial was up 2.2 per cent to a more than three-year high of $4.21 after Bain Capital matched CC Capital Partners' $4.30-per-share, $2.9 billion offer for the wealth manager.

In the heavyweight mining sector, BHP was up 0.2 per cent, Fortescue had gained 0.1 per cent and Rio Tinto had climbed 0.3 per cent.

In the energy sector, Woodside was up 2.2 per cent and Santos had advanced 1.7 per cent as the price of Brent crude spiked to a five-month high of $US81 a barrel amid a stronger round of US sanctions on Russia's oil and gas sector.

The Australian dollar was buying 61.58 US cents, from 61.93 US cents at close of business Friday, its lowest level against the greenback since April 2020.