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On Thursday at 12:30 am GMT the Land Down Under will publish its employment numbers for the month of March.

Think we’ll see enough AUD volatility to sneak in some pips?

Before you place your orders, you hafta know these points first:

February was a strong month for the labor market

  • February employment change: +88.7K vs. +30K expected
  • Jobless rate plunges to 5.8%, the lowest since March 2020
  • Full-time employment shot higher (+89.1K) while part-time jobs dipped (-0.5K)
  • January’s employment change was revised higher from 29.1K to 29.5K

Closed borders posed little problem for Australia’s recovery in February, as continued business reopenings boosted the labor market.

Employment grew by another 88,700 to a one-year high while the jobless rate dropped to 5.8%. That’s way better than the 6.3% rate that markets had expected!

AUD 15-Minute Chart Overlay
AUD 15-Minute Chart Overlay

Aussie bulls ate up the report and propelled the comdoll to new daily highs… until the London session traders became more interested in pricing in the Fed’s easy policies and shorted high-yielding currencies like the Aussie.

Markets expect more job gains in March

  • Australia could see another +20K net job creation in March
  • The jobless rate is seen remaining at 5.8%
  • Labor force participation rate could tick higher from 66.1% to 66.3%

As you can see, traders don’t expect to see a repeat of February’s boss-level numbers.

For one thing, Australia’s JobKeeper wage subsidy program had expired on March 28 and Treasury estimates that up to 150,000 jobs could be lost. Bloomberg says that’s enough to bump up the unemployment rate back to 7.0%. Yipes!

Leading indicators have a few more clues:

  • NAB’s business survey noted a “lift in employment” as a reason for higher price pressures
  • ANZ’s job ads grew by another 7.4% to their highest levels in 12 years
  • AIG’s manufacturing PMI cheered the employment surge as high levels of new orders boosted the manufacturers’ confidence
  • AIG’s services PMI rose by 2.9 points but noted the “stable or mildly decreasing” employment for the month
  • AIG’s construction PMI printed its strongest monthly gain on record, with the employment index also hitting record highs on the back of house builders starting their residential projects to meet the HomeBuilder grants deadline

So, it looks like Australia’s labor market is in for a spotty month as one-time events like the expiration of the JobKeeper and HomeBuilder programs could distort the overall numbers.

Leading indicators still point to recovery, though, as more businesses open up after the heavier restrictions are lifted. This could mean more gains for the Aussie against its major counterparts.

You just gotta keep an eye out for other potential catalysts! Remember, AUD made intraday gains last month until traders paid more attention to the Fed’s easy policies.

Australia’s jobs data will follow a parade of FOMC member speeches this week, so you should look out for signs that traders are more interested in pricing in their sentiments.