Aussie Employment Disappoints
The labor market picture in Australia worsened for the month of December, as companies surprisingly shed jobs for the first month in last four. According to the Australian Bureau of Statistics, the country saw a decline of 5,500 positions, compared to estimates of a 5,000 monthly gainer. As a result, the national jobless rate ticked higher at 5.4% - compared to previous estimates of a more stable 5.3%. Now, although this isn’t a bad rate of unemployment, it is reflective that things could get worse as the overall economy shows signs of slowing down.
Subsequently, the participation rate sank to 65.1%, a historical low as workers remain widely discouraged over current employment prospects.
Not only were today’s figures pessimistic in the sense of economic fundamentals, they were disappointing on the monetary level as well. The fact that labor markets remained depressed is continued evidence that recent rate cuts enacted by the Reserve Bank of Australia aren’t making their way through the economy as earlier anticipated. The sentiment should push further rate cut considerations by the central bank in their next meeting on February 5th – with the market pricing in a 40% probability of a 25 basis point reduction.
Resistance via the 1.0600 psychological figure remains steadfast in suppressing any upward momentum in the AUDUSD. Subsequent failure to break above the key round figure would prompt a decline to initial support at 1.0477 – with a further downside violation opening scope for a move to 1.0427 38.2% fib support.
Source: FXTrek Intellicharts