Australia’s Job Rate Is Well Above Expectations

Australian employment blows past estimates taking AUD/USD above 1.0200
UK IP/MP beat
Nikkei -0.66% Europe -0.60%
Oil $96.15/bbl
Gold $1469/oz.

Europe and Asia:
AUD Employment Change 50.1K vs. 11.5K
AUD Unemployment Rate 5.5% vs. 5.6%
AUD Full Time Employment Change
JPY Leading Index 97.6% vs. 97.7%
NZD Employment 1.7% vs 1.1%
GBP BOE Rate Decision n/a
GBP BOE Asset Purchase Target n/a
GBP Industrial Production 0.7% vs. 0.3%
GBP Manufacturing Production 1,1% vs. 0.4%

North America:
USD Initial Jobless Claims 8:30
USD Wholesales Inventories 8:00
CAD New House Price Index 8:30

The latest statistics show that employment rate in Australia has increased significantly, so the Aussie is quickly advancing trough the Asian session trade. However, the pair faced strong resistance at the 1.0250 mark and was at its peak during the European morning dealing. The Australia job growth also marked a significant increase, advancing to 50.1K compared to the anticipated 11K. Meanwhile the unemployment rate also pleasantly surprised many people by dropping to 5.5% despite the 5.6% forecast.

The figures are well above expectations on all fronts. Two of the best examples is the increase of the participation rate which increased by 0.1% to reach 65.3%, and the 35,500 increase in full time jobs. According to the statistics, the new job spots are located in the largest Australian states – Victoria and New South Wales. Both of these states added around 28,000 jobs, while the mining center situated in the western part of the country only contributed 2,100 jobs.

This data also shows analysts that the Australian economy isn’t as dependent on mining as many of them thought. In fact, the country is doing relatively well when compared to previous years. However, the positive figures caught some Aussie longs off-guard who anticipated worse data because of the reduced mining demand.

Strong employment data also has a significant impact on the Republic Bank of Australia’s ability to deal on monetary level. The rapid job growth is good news for everyone, but unless it manages strengthen pricing pressure, and if the Australian economy continues to improve, the bank may be forced to look for a solution which will make the process easier. As soon as the latest jobs figures were released, the pair bounced up to 1.0250, however it faced strong resistance there and wasn’t able to break it so far. So far, the pair looks pretty stable, but if the risk flows in North America, the AUD/USD pair may easily increase up to 1.0300.

There is some positive news coming from the UK as well. The Manufacturing and Industrial production in the UK managed to beat the initial expectations by registering 1.1% against the expected 0.4% and 0.7% compared to the anticipated 0.3%. This surprising increase further strengthened the UK’s economy, and analysts expect that the BoE’s rate announcement this morning stopped the increase of the Cable which is stuck at the 1.5600 figure.

One of the most anticipated reports is the jobless claims report which should come from North America. The markets and analysts are expecting an increase to at least 333K when compared to the 324K registered last week. One of the main reasons for this is the steady and rapid increase of the figure during the past couple of weeks. However, if the report is well above expectations, the USD/JPY pair may hit a new low and lose the gains it registered during last week’s NFP report.

So far, the pair wasn’t able to hold the 99.00 figure and is close to breaking the 98.50 support level. Basically, this shows that the pair has once again hit a short- term top which will keep it away from the key 100.00 level. Many markets are still concerned about the condition of the US economy and the jobless claims news which come from there.