The Aussie reacts to Australia's jobs report and China's trade numbers

Best analysis

There was some volatility in the Australian dollar today which was the result of mixed Australian labour market figures and Chinese trade data. At first, the Aussie jumped higher on the back of June’s jobs report out of Australia, but the initial euphoria quickly wore off and it sank below pre-report levels. The commodity currency was then hit again by some slightly disappointing trade figures out of China. The resulting sell-off saw AUDUSD dip below 0.9400, but the pair didn’t break any major support levels.

Australia’s mixed labour market report

Australia’s unemployment rate jumped to 6.0% from a revised 5.9% in May. The market was expecting the unemployment rate to jump to 5.9% - the original read of the unemployment rate in May was 5.8% (it’s likely going to be a while before we see a material drop in the unemployment rate). The other bit of slightly disheartening news was a fall in full-time jobs over the month (-3.8K), but this can be forgiven due to the recent strong performance of the full-time jobs market.

On the upside, the labour force participation rate jumped to 64.7% from 64.6% - it still hasn’t recovered all the ground it lost last year, but at least it’s heading in the right direction again. In other news, 15.9K jobs were added during June, slightly more than the 12K the market was expecting (obviously they were all part-time jobs).

Source: FOREX.com, Bloomberg

China’s mildly disappointing trade numbers

In China, both exports and imports were softer than expected during June, with the former rising 7.2% y/y (exp. 10.4%) and the latter increasing 5.5% y/y (6.0%). Also, the trade surplus shrunk to $31.6bn from $35.92bn (exp. 36.95bn). The miss in imports and exports is disappointing, hence the sell-off in the Aussie, but it’s not a game-changer. In saying that, the next few trade reports are going to be closely watched for any signs of weakness, with exports expected to pick up further and imports should start to improve in spite of a slowing housing market. 

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