When is the Australian employment report and how could it affect AUD/USD?
|Australian jobs report (Nov)
Australia's monthly jobs report is expected to show an improvement when compared to its previous October reading. To put things into perspective, the Australian employment sector has been enjoying one of the best historical runs in more than 2 decades, as the stretch of positive employment prints can only be mirrored by the conditions of back in 1993 when the employment change kept improving for over 15 months in a row.
Ahead of the data release, Westpac wrote a cautious note to clients, noting that "it is not surprising that there are expectations for a negative print sometime soon, even just from survey volatility.” That said, the bank adds that for now "we are not looking for any meaningful moderation in the pace of employment growth. Our above market forecast for a 25k rise in employment will see the annual pace of growth ease back a touch to 2.8% year and the three-month average change drop a touch to +21.7k in November from +23.3k in October.”
How could the data affect AUD/USD?
The AUD/USD has printed a commanding bullish candle off the daily chart, with the close at the highs of the day, suggesting that the lack of profit-taking is unequivocally a clue of the confidence from market participants to a potentially positive print. Should the overall print beat the estimates, the next key areas to watch out for are 0.7650, which converges with a horizontal resistance line ahead of 0.7670, where a major POC from the early Nov auction comes into play; should this level be overcome, then all bets are off for an attack towards the 0.77 area. If the Australian jobs report, in turn, disappoints, on the downside, the psychological barrier at 0.76 will act as the first magnet for prices, followed by 0.7580, where an old resistance will provide support, ahead of 0.7550, latest swing low on Dec 13th.
Key notes
Australia: Employment outlook remains robust - Westpac
Justin Smirk, Research Analyst at Westpac, suggests that Australia’s leading indicators continue to point to a robust labour market while the soft October print lowers the chance for a soft or negative November print.
Australia: Labour market the most positive in years - TDS
Australian employment in October underwhelmed at +3.7k (TD +30k, mkt +18.8k) but full-time employment at +24.3k and upward revisions to Sep were bright spots as the 5.4% unemployment rate is the lowest since February 2013, notes the research team at TDS.
About the Employment Change
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).
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