Forex Flash: Australian jobs report - risks to the downside, says Westpac (Barcelona) - Australia’s December employment report is scheduled for release at 00.30GMT today. Westpac looks for a -10K fall in total jobs, after the 14K rise in November. "This places us firmly on the gloomy end of expectations, which range from -10K to +16K and a median of +5K (Bloomberg)" notes Sean Callow, FX strategist at Westpac.

Mr. Callow sees risks of a disappointing number, "judging by business surveys, unemployment expectations and the very weak trend in job advertising" he observes. "Our unemployment rate is in line with consensus however, at 5.4% from 5.2%."

"Rounding and assumptions on participation rate are of course wild cards. Like jobs reports everywhere, there is plenty of scope for surprise though the past three reports have all been on the strong side for headline jobs growth" Mr. Callow adds.

RBA cut in February is now being priced at around 35-40%, which makes Sean think that "a -10K or weaker headline might knock about 30-40 pips off AUD/USD but pricing for a rate cut as soon as Feb is unlikely to exceed 50% at least until Q4 CPI (23 Jan)."