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AUD: Aussie summer is over, back to work – Westpac

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    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.”
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