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By Cecile Lefort and Swati Pandey
SYDNEY, Nov 12 (Reuters) - Australian dollar surged and interbank futures slid on Thursday after a strong jobs report led markets to widen the odds of an interest rate cut.
The Aussie leapt 1.2 percent on the day to $0.7146, pulling away from a one-month low of $0.7016 touched this week. A sustained break above $0.7170 would target $0.7220.
The Aussie also jumped more than 1 percent on the yen, pound and kiwi, while the euro skidded to a three-month low of A1.5050.
Data showed the economy created 58,600 jobs in October, far surpassing forecasts of 15,000, while the jobless rate fell sharply to a five-month low.
"Clearly there won't be another rate cut in 2015. It is possible that the last rate cut has occurred in this cycle," said Craig James, chief economist at CommSec, forecasting a steady rate outlook for the foreseeable future.
Interbank futures nearly priced out the chance of another rate cut in the 2.0 percent cash rate with the probability of a move in February at 28 percent, from an around 50-50 chance of an easing before the data.
The resilience of employment was one reason cited by the Reserve Bank of Australia (RBA) when it skipped a chance to ease this month.
Australian government bond futures tumbled to multi-month lows, with the three-year bond contract off 15 ticks to 97.820. It went as far as 97.810, the lowest since June. The 10-year contract fell 11.5 ticks to 96.9850, while the 20-year contract dropped 9 ticks to 96.4650.
The New Zealand dollar NZD=D4 was dragged higher to $0.6570, from $0.6553 in early trade, but remained within reach of a one-month trough around 65 cents touched recently.
Data on Thursday showed manufacturing expanded at a slower pace after two strong months while food inflation slipped 1.2 percent.
The kiwi dollar was vulnerable to a further easing to official cash rates, especially after the country's central bank highlighted growing risks to its financial system from a dairy slowdown.
New Zealand government bonds 0#NZTSY= eased sending yields 4.5 basis points higher at the long end of the curve.