Research Team at TDS, notes that the Australian employment in February stood still (+300) with a shift from part-time (-15.6k) into full-time (+15.9k).
Key Quotes
“A slide in the participation rate from 65.1% to 64.9% saw the unemployment rate dip from 6.0% back to 5.8%.
The monthly jump in full-time employment and low 5.8% unemployment rate (mkt 6.0%) boosted the AUD back to post-FOMC highs, currently $US0.761. We recommend fading this rally as the RBA does not take one monthly labour market report at face value.
Annual employment growth continued to ease further from the lofty rates reached late last year, and in fact now better reflects guidance from job vacancy data.
We see the AUDNZD rally to 1.125 reaching its limits for now, as today’s AUD rally as a combination of post-FOMC positioning and a reaction to the surprise 5.8% unemployment rate. In addition, data is extremely thin over the next two weeks for both Australia and New Zealand.
New Zealand’s decent GDP report today (+0.9% for Dec qtr 2015, mkt and RBNZ +0.7%) and more careful consideration of the RBNZ rushed cut of last week, has seen us push our April RBNZ cut to 2% into June, also limiting further AUDNZD strength for now.”
