Forex Trading Library

Aussie Jobs Report keeps getting better and better

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Australia’s unemployment rate stood at 6% in June, while May’s unemployment rate was revised to 5.9% from previous estimates of 6%.

The Australian jobs report for the month of June was overall positive as employment grew by 7300 jobs. The previous month’s jobs numbers saw a slight downward revision to 39,900 jobs down from previously estimated 42,100. Unemployment rate for Australia ticked a point higher to 6%, from an upwardly revised May unemployment rate of 5.9% (previously 6%). The trend for the Australian labor market shows a consecutive 20 months of increase as of the latest release. On an annual basis, the Australian employment growth rate stood at 1.9% in June from 2% previously.

The June employment report for Australia was overall encouraging shown by the pick up in the number of jobs being created alongside more number of hours being clocked by existing labour force. The uptick in employment is likely to increase business and consumer confidence in the coming months as spending starts to increase.

The Aussie was 0.72% at the time of writing after the jobs report was released. The currency posted a session low to 0.73935 before rallying higher, but remains within yesterday’s high of 0.75. A close above yesterday’s high could signal further gains in the currency.

FOMC Minutes

Late yesterday, the FOMC meeting minutes for June was released. The minutes revealed that the Fed members saw the US economy was slowly heading towards recovery and that the conditions were good enough to sustain a Fed rate hike. However, the board expressed concerns on weak consumer spending and contagion risks from China and Greece (Eurozone).

Only one member noted that they need to see more evidence of economic growth was strong. Overall, the Fed’s minutes did not reveal any significant shifts in its bias towards the rate hike leaving the markets perplexed.

The markets on the other hand are starting to get increasingly cautious whether the Fed would be able to hike rates this year. Most recently, the IMF signaled that the Federal Reserve should hold off rate hikes this year and that the Central bank should wait at least until the first half of 2016. The 10 year benchmark yield in the US fell 0.07%, to trade at 2.19%.

The US Dollar was also weaker after the FOMC minutes with the US Dollar Index falling from session highs of 97 to end the day at 96.37.

Investors will be looking to Fed Chair, Janet Yellen’s speech due this Friday where she is slated to speak about the US economic outlook in Cleveland. However considering that this speech is not a testimony to the congress, it is unlikely that Yellen will go too much into the details.

RBA Monetary Policy

Earlier this week, the Reserve Bank of Australia left its monetary policy unchanged with interest rates steady at 2%. In its statement, the RBA noted that further economic data would be considered ahead of any policy changes. So far, Australian GDP has managed to remain in the positive albeit growing at a subdued pace. The pickup in the labour markets is likely to see the RBA hold interest rates steady for the next month as well.

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