RBA top bankers speak up following this week's disappointing labour market data

Following this week's disappointments in the labour market data, traders are timing into Australia's top central bankers on Friday who are crossing the wires currently.

Reserve Bank of Australia (RBA) Governor Philip Lowe said further increases in interest rates would be needed in the months ahead to ensure sky-high inflation returns to the target range.

Speaking before lawmakers, he said how much further interest rates need to increase would depend on developments in the global economy, how household spending evolves and the outlook for inflation and the labour market.

Key comments

We are not done yet on rates.

Our assessment is we have to raise rates higher.
    
The labour market is still very tight.
    
Could see additional 50,000-70,000 jobs come through data in next month or so.
    
If we saw another weak jobs report might reconsider if labour market still tight.

If we stay on top of inflation, rates could start to fall next year.

RBA's Luci Ellis, Assistant Governor (Economic), said more people than usual took leave in January and unusually large numbers waiting to start a new job.

''Non-accelerating inflation rate of unemployment (NAIRU) unemployment rate is likely to be in the low 4's,'' Ellis said.

AUD/USD update

AUD/USD has been under the weather since the Australian Employment Change and jobs data released by the Australian Bureau of Statistics came out as follows:

• Australia Employment Change Jan: -11.5K (est 20.0K; prev -14.6K).
• Unemployment Rate Jan: 3.7% (est 3.5%; prev 3.5%).
• Full Time Empl Change Jan: -43.3K (prev 17.6K).
• Part Time Empl Change Jan: 31.8K (prev -32.2K).
• Participation Rate Jan: 66.5% (est 66.6%; prev 66.6%).

The bulls are attempting to hold off the bears but they keep coming back stronger:

AUD/USD Price Analysis: Bears and bulls about to standoff at key 0.6850s