AUD: Aussie Summer is Over, Back to Work – Westpac
Sean Callow, Research Analyst at Westpac, notes that the AUD has found
some good news as the NAB Australian business survey produced an
improvement in both confidence and in trading conditions in March.
Key Quotes
“Most
notable was the +12 reading on conditions, a high since early 2008 i.e.
pre- GFC. The RBA should welcome this report when it meets in May, a
prospect that boosted AUD and saw expectations for further easing
trimmed.
Today there was more support for Westpac’s long-standing
call for no more RBA rate cuts in the March labour force data. After a
fall in jobs over the Australian summer, there was the catch-up in total
employment we expected in March, with a 26k rise close to our 25k call
(median 17k). But the details were somewhat surprising, especially the
participation rate holding steady at 64.9%, a low since Sep 2015. This
drove the unemployment rate down from 5.79% to 5.72%, a comfortable
distance below the politically sensitive 6% mark.
The composition
of the 25k jobs gain was not ideal: part-time jobs jumped 35k,
full-time work slipped -9k. Aggregate hours worked were estimated to
have fallen -1.1% m/m. Moreover, the state breakdown looks curious, with
mining-sensitive WA reported as leading the way, +17k, ahead of VIC
+11k and NSW and SA both +5k, while QLD was reported as -15k.
Still,
the 2.0% y/y total job growth is in line with Westpac’s leading
indicators and a lot more plausible than the 3% y/y pace of November.
Our economics team believe the 2% pace should be maintained until at
least late Q3. Short term, the lowest unemployment rate since Sep 2013
should reinforce AUD’s more optimistic tone.”
(Market News Provided by FXstreet)
