When is the Australian employment report and how could it affect AUD/USD?

September month employment statistics from the Australian Bureau of Statistics, up for publishing at 00:30 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 how much employment damages Victoria’s lockdown did amid the coronavirus (COVID-19) resurgence.

Market consensus favors Employment Change to drop to -35.0K from +111K on a seasonally adjusted basis whereas the Unemployment Rate is likely to rise from 6.8% to 7.1%. Further, the Participation Rate may remain stagnant at 64.8%.

Also in the line is China’s September month Consumer Price Index (CPI) and Producer Price Index (PPI), up for publishing at 01:30 GMT. The data will be important for AUD/USD traders as Beijing is the largest customer of Australia despite recent jitters. Forecast suggests the headline CPI ease from 2.4% YoY to 1.8% whereas PPI may recover from -2.0% to -1.8% during the stated month.

TD Securities follow the market suit while expecting negative impacts of a likely downbeat employment report from Australia,

We are forecasting a -20k outcome for the Sep Employment report. This number would be consistent with the Weekly ABS Payrolls series, but we do acknowledge this series has not been the best marker for the official release. Given the strong official prints in recent months, the risk of a giveback and before stricter JobKeeper eligibility criteria kick in from October 01, we think the risk to our forecast is to the downside. We expect the participation rate to have increased to 64.9% and the unemployment rate to have edged higher to 7.1%.

How could the data affect AUD/USD?

With the recently dovish comments from the RBA Governor Philip Lowe, traders will closely observe the headline employment numbers to forecast any further rate cuts. It should be noted that the activity restriction in the NSW and Victoria highlights the odds of a downbeat employment report, which in turn could keep dragging the AUD/USD prices towards the south. Also likely to weigh on the quote could be the risk tone that currently bears the burden of US stimulus deadlock and the coronavirus (COVID-19) wave 2.0.

Technically, the pair’s latest fall broke a three-week-old ascending trend line, at 0.7160 now, which in turn keeps the bears hopeful to attack the monthly low near 0.7095. Though, any more weakness by the AUD/USD past-0.7095 will be tamed by the September low surrounding the 0.7000 psychological magnet. On the contrary, the pair’s recovery moves beyond 0.7160 will need a clear break of a falling trend line from September 01, at 0.7218 now, to please the buyers.

Key Notes

AUD/USD: Pressured below 0.7200 on RBA’s Lowe with eyes on Australian employment data

AUD/USD Price Analysis: Bears on the move to break key trendline support

Australian Employment Preview: September job losses to flag RBA rate cut

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).

About China CPI

The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchase power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.