June month employment statistics from the Australian Bureau of Statistics, up for publishing at 01:30 GMT on Thursday, will be the immediate catalyst for the AUD/USD pair traders. The figures become all the more important as traders will be keen to observe job recovery after the economic halt.
Market consensus favors Employment Change to recover to +112.5K from -227.7K on a seasonally adjusted basis whereas the Unemployment Rate is likely to rise from 7.1% to 7.4%. Further, the Participation Rate may increase to 63.6% from 62.9% previous readouts.
Westpac stays skeptical of market forecasts ahead of the release as their analysts say,
Employment fell about -835k in April and May and there is a wide range of expectations on whether the June survey will capture a partial rebound. The median forecast is +100k but the range is -60k to +350k, with Westpac on -30k. Westpac looks for the unemployment rate to rise from 7.1% to 7.3%. This matches consensus, with the extent of the expected rise in participation difficult to predict, after its collapse to a near-20 year low of 62.9%.
TD Securities, on the other hand, remain supportive to the consensus while saying,
We pencil in a rebound of +120k for headline employment over June as lockdown restrictions were eased. A rebound would be consistent with a number of surveys such as Seek and ANZ job ads pointing to a pick up in the labor market. As such we are expecting a pick up in the participation rate to 63.4%, but we have the unemployment rate easing a touch to 7% on our assumption the population declined 30k on the month.
How could the data affect AUD/USD?
Considering the latest risk-on mood, backed by the hopes of coronavirus (COVID-19) vaccine, expectedly upbeat prints could add strength in attacking June month’s high. However, the pair’s recent up-moves might fade if the jobs report prints mildly positive readings. The reason could be traced from the worsening of pandemic situations in Melbourne and restrictions in various states of Australia considering the spread of the virus. Even so, the RBA’s refrain from favoring any further rate cuts, for now, could keep a floor below the quote.
Technically, Repeated failures to stay strong past-0.7000 might not be a problem for the bulls aiming to cross June month high, near 0.7065, unless the pair slips below 0.6920 comprising lows marked since July 07 and 21-day SMA.
Key Notes
AUD/USD: Again pierces 0.7000 with eyes on Aussie employment, China GDP
AUD/USD Forecast: Australian employment figures are already old news
Australian Employment Preview: Upbeat figures could send AUD/USD to 0.71
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 released 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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