The Aussie had a mixed report card against its counterparts last week. Will this week’s catalysts push it firmly in one direction?
Here are potentially market-moving events you should watch out for:
Employment reports (Jan. 24, 1:30 am GMT)
Australia’s labour market numbers were a mixed bag of nuts in November and failed to spur one-directional trades for the Aussie.
Net employment popped up from 28,700 to 37,100, while labor force participation rate ticked higher from 65.6% to 65.7% and likely pushed unemployment rate higher from 5.0% to 5.1%.
The 43,400 net increase in part-time employment didn’t inspire confidence, however, especially since a net of 6,400 full-time jobs were lost while monthly hours dipped by 0.2%.
This week, analysts expect the unemployment rate to remain at 5.1%. A net of 18,000 jobs are also seen, while the participation rate is expected to edge back down to 65.6%.
Australia’s tight labour market conditions is one of the reasons why the Reserve Bank of Australia (RBA) can afford to be chill with its policies.
However, if this week’s release reflects weaknesses in other parts of the economy (like the housing market) spilling over to the labour market, then we might see a bit of bearish price action for the Aussie.
Global risk sentiment
Australia might only have one top-tier report on the docket, but that doesn’t mean it will only take cues from one market-mover!
For starters, the ECB and BOJ are both scheduled to publish their monetary policy decisions. While nobody is expecting policy changes from the central banks, everyone will wait for clues on where their policy sentiments are biased in the foreseeable future.
And then there’s the teeny tiny issue of the U.S.-China trade war.
Remember that Chinese Vice Premier Liu He will touch down in Washington on January 30 for two days of trade talks with U.S. trade representative Robert Lighthizer. Traders will pay close attention to whispers of any form of deal that might be presented on the table, so make sure you do, too!
Missed last week’s price action? Read AUD’s price recap for Jan. 14 – 18!