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Comdoll traders huddle up! On Thursday at 2:30 am GMT Australia will publish its labor market data for the month of April.

Planning on trading the event? Here are points you need to remember:

What happened last time?

  • March added net 25,700 jobs vs. 15,200 expected
  • February employment change revised from 4,600 to 10,700
  • March unemployment rate up from 4.9% to 5.0%
  • March labor force participation rate improved from 65.6% to 65.7%

The economy added a net of 25,700 jobs in March, which was way better than the 15,200 figure that analysts had expected and the 4,600 net addition in February.

Details also looked good with average monthly hours increasing by 0.7% and full-time employment rising by 48,300 even as 22,600 part-time jobs were lost.

The unemployment rate also edged higher from 4.9% to 5.0% but that might have been due to the labor force participation rate improving from 65.6% to 65.7% for the month.

AUD 15-Minute Forex Charts
AUD 15-Minute Forex Charts

The Aussie spiked higher across the board at the release of the better-than-expected report. But unfortunately for the bulls, a string of disappointing PMIs from the euro zone dragged on risk appetite and higher-yielding currencies in the next trading sessions.

What are traders expecting this time?

  • April employment change to slip from 25,700 to 15,000
  • April unemployment rate to hold steady at 5.0%

Traders expect employment numbers to take a chill pill from March to April as they had in four of the last five years. Still, this month’s gains should be enough to keep the jobless rate at 5.0% for another month.

Do leading indicators support a weaker reading?

The employment component of AIG’s manufacturing index was the dark cloud in an otherwise strong report. It fell by 5.1 points to 51.5, with wages registering its slowest growth since October 2017.

The employment component of AIG’s construction index doesn’t look much better with its 6.9-point drop, the steepest since May 2013.

The employment component of AIG’s services index also told the same story. It dropped by 6.2 points to 46.0 after months of improvement, while wages fell sharply enough to get into contractionary territory (48.2).

NAB’s business confidence report published earlier today also noticed the labor market’s weakness. It said that “the impact of slowing activity and a weak outlook may now be flowing through to the labour market,” and suggested 14,000 net job increase in April.

The silver lining among the reports can be found in ANZ’s job ads, which “only” fell by 0.1% in April after seeing steeper declines in the last five months.

So, it looks like the labor market is likely heading in a weaker direction. I guess the question is just how weaker the official numbers will be.

Remember that while the Reserve Bank of Australia (RBA) has kept its rates steady last week, it also made clear that it’s expecting better labor market numbers to pick up the slack and boost inflation in the foreseeable future.

If this week’s numbers come in much weaker than analysts are expecting, then the RBA might have to raise its rates sooner or faster than traders are currently expecting.

But if April’s labor market data show continued strength, then we could see the Aussie pop up against its counterparts and maybe even establish grounds for intraweek uptrends.