Overview of the Australian jobs report
Early Thursday markets will see Australian employment data from the Australian Bureau of Statistics at 11:30 Sydney/9:30 Singapore/HK and 01:30 GMT. Having witnessed mixed jobs data in May and the latest emphasis on the unemployment rate by the Reserve Bank of Australia (RBA) even after the rate cut, June month employment change, and unemployment rate become crucial for AUD/USD traders.
Market consensus favors a decline to 17.5KK from 28.4K of seasonally adjusted employment change whereas the unemployment rate is likely ticking down to 5.1% versus 5.0% prior. Also, the participation rate is likely to remain unchanged at 65.8%.
TD Securities emphasizes on last month's general election to be the key driver of likely boost to the employment scenario:
For May employment we expect an election bounce of +50k, skewed towards part-time as the Australian Electoral Commission (AEC) temporarily hires poll booth staff and vote counters. The July 2016 election saw a temporary jump of +73k part-time workers. A lift of +50k with an unchanged participation rate could see the unemployment rate dip again to 4.9% and put a nail in the July cut coffin.
How could the data affect AUD/USD?
Despite RBA’s latest rate cut, the central bank continues to highlight unemployment rate as a key driver of next policy moves, which in turn increases the employment data’s impact on the AUD/USD pair. With likely temporary uptick due to last month’s election, any disappointment from the data will be taken seriously to provide further damages to the Aussie pair.
Technically, 0.6900 and 0.6830 comprising January 2016 lows seem strong downside support with 0.6960 and 50-day simple moving average (SMA) level of 0.7010 being immediate resistance to watch during the quote’s pullback. Should prices rally past-0.7010, 100-day SMA level around 0.7065/70 can lure the bulls.
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).
About the Unemployment Rate
The Unemployment Rate release by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. A decrease of the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).
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