0
135
Research Team at TDS, notes that the employment in November apparently
jumped by a little over +71k, defying fairly widespread expectations of a
small correction (TD and mkt –10k) after the outsized October print
(revised down but still a solid +56.1k).
Key Quotes
“As the participation rate jumped to 65.3%, the unemployment rate “only” fell from 5.9% to 5.8%.”
“Annual employment growth surged ahead to 3%/yr, zooming past the guidance that job vacancy data suggests, such as the 2% according to ANZ job ads.”
“We are skeptical that a sub-trend economy with shrinking domestic demand is generating jobs at a pace this year that is literally multiples of recent years. Employment in original terms used to shrink in October and November (2009-2013) but in 2015 a large number of jobs were created; hence these consecutive outsized seasonally adjusted estimates have dropped out.”
“Skeptical or not, the AUD jumped back to Monday’s $US0.7335, or back to uncomfortable levels for the RBA given where key commodity prices are trading just now. Sell on such rallies over $US0.73.”
“The fixed income market also reacted accordingly, with 3yr bond yields adding +10bp to 2.22%, bear flattening the curve. Short bonds look cheap given inflation is very low and the RBA is in no mood to hike. OIS has a February rate cut at a wafer-thin 10%.”
Key Quotes
“As the participation rate jumped to 65.3%, the unemployment rate “only” fell from 5.9% to 5.8%.”
“Annual employment growth surged ahead to 3%/yr, zooming past the guidance that job vacancy data suggests, such as the 2% according to ANZ job ads.”
“We are skeptical that a sub-trend economy with shrinking domestic demand is generating jobs at a pace this year that is literally multiples of recent years. Employment in original terms used to shrink in October and November (2009-2013) but in 2015 a large number of jobs were created; hence these consecutive outsized seasonally adjusted estimates have dropped out.”
“Skeptical or not, the AUD jumped back to Monday’s $US0.7335, or back to uncomfortable levels for the RBA given where key commodity prices are trading just now. Sell on such rallies over $US0.73.”
“The fixed income market also reacted accordingly, with 3yr bond yields adding +10bp to 2.22%, bear flattening the curve. Short bonds look cheap given inflation is very low and the RBA is in no mood to hike. OIS has a February rate cut at a wafer-thin 10%.”
