Australia: Steady employment soothes the RBA - TDS

Sandeep Kanihama FXStreet Contributor

Australian unemployment rate dipped to 4.9% in February via a +5k lift in employment (TD flat, mkt +15k), while full-time pulled back by -7k after a string of strong months, as part-time rose +12k, notes Annette Beacher, chief Asia-Pacific macro strategist at TD Securities.

Key Quotes

“The participation rate edged lower as we expected to 65.6%. The RBA expects the unemployment rate to be 5% this year, so today's report is consistent with that view.”

“The RBA also focuses on underemployment, and there is good news there as well. Underemployment and underutilisation rates/ratios have been edging lower (not in a straight line) for the last two years. The slump in the underutilisation rate hints at 3%/y wages growth by year end.”

“The AUD has traded within a US0.70-73 range for the last six months, and today's rally doesn't threaten the range. OIS is priced for a 25bp rate cut by August. The next policy hurdle is Q1 CPI on 24 April, where our tracking looks for core to be 1.75%/y.”

“We do not look for rates cuts at this juncture.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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