Australia is set to print its employment report! Will the numbers be enough to prevent even more dovishness from the RBA?
RBA’s meeting minutes (Apr 16, 2:30 am GMT)
In its meeting earlier this month, the Reserve Bank of Australia (RBA) injected a bit of dovishness when it shared that it will “set monetary policy to support sustainable growth,” a departure from its earlier statements about keeping policies unchanged to “be consistent with sustainable growth.”
But that was days ago. Since then the government has unveiled its somewhat stimulative budget plan and the U.S. and China have inched closer to making a concrete trade deal.
How committed is the RBA to its slightly dovish stance? Remember that RBA members are already jittery over falling house prices and rising household debt. If they tack on any more concerns, or if they share more about why they’re worried, then we might see the Aussie dip against its major counterparts.
Employment data (Apr 18, 2:30 am GMT)
The biggest event for the week is likely the jobs data, which has been a strong point for Australia’s economy in the past couple of months.
Thing is, traders are now looking beyond the headline numbers.
In last month’s release, for example, we saw the Aussie fall almost right after it popped up on the back of the unemployment rate hitting eight-year lows. Turned out, traders were more concerned that employment growth momentum had slowed down.
This week, analysts are a net of 15,000 workers to have found jobs in March, higher than the 4,600 uptick that we saw in February. The jobless rate is also expected to tick higher from 4.9% to 5.0%, while the labor force participation rate is expected to maintain its 65.6% reading.
Deputy Governor Guy Debelle recently shared that “[t]he strength of the labour market is at odds with the slow pace of GDP growth.” And given last month’s reaction to the report, it looks like lower jobless rates won’t be enough for some traders.
For the Aussie to gain ground (and keep it), the economy would have to see stronger job gains in March.
Overall risk sentiment
Australia won’t be printing a lot of top-tier reports this week, but that doesn’t mean that you should take a chill pill!
China, for one, will be printing reports such as its quarterly GDP, fixed asset investment, industrial production, and retail sales data. Uncle Sam will also release its retail sales data while the euro zone will see a PMI parade over the next couple of days.
Any one of these catalysts may affect demand for the high-yielding Aussie, so make sure you’re on top of your trades when you execute them!
Missed last week’s price action? Read AUD’s price recap for April 8 – 12!