THE TAKEAWAY: Aussie Employment Gained 15.5 K Jobs > Employment Change Far Above Expected > AUDUSD Jumps
Employment data published by the Australian Bureau of Statistics show an addition of 15,500 jobs to the Aussie economy, causing the unemployment rate to fall to 4.9 percent. The rise in jobs drew mostly from part time work, which added 26,000 jobs to payroll. Full time work experienced a 10,500 drop in workers. The overall participation rate fell to 65.2 percent from 65.4 percent a month earlier.
Analysts expected the unemployment rate to rise to 5.3 percent this month, a 5,000 job decrease in total employment, and a flat participation rate. Neither analysts nor the markets expected an improvement of such magnitude this month, and traders were forced to price in the change, boosting the AUDUSD upward. Though overall jobs increased in number, the drop in full time employment as well as the unexpected decline in the participation rate tempered the positive trading sentiment response to the lower unemployment rate. Nonetheless, the figures did suggest to analysts a decreased likelihood of a Reserve Bank of Australia (RBA) rate cut next month. Before the release, markets expected a 96 percent probability of a 25 basis point rate cut by the RBA in the upcoming period. Following the release, those expectations fell to 68 percent probability.
In the moments after the report’s release, AUDUSD rose from 1.0058 to as high as 1.0097.
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