Australian markets will be heavily focussed on key employment data set to be released by the ABS early in the Asian trading day on Thursday. Recent data prints have proved that the Australian jobs market remains resilient, and this has been dampening the hopes of many households that the Reserve Bank of Australia will cut rates in the coming months. Alongside inflation metrics, the jobless rate is a key consideration for the RBA and despite a rise in the unemployment rate to 3.8% in March, up just 0.1% from the February figure, many commentators think that this level is still too low for the Reserve Bank to be acting.
Yesterday’s Wage Price Index print came in slightly lower than expected with a 0.8% quarterly increase against the expected 0.9%, the annual pay growth ticking down from 4.2% to 4.1%. Once again, even though this was seen as a move in the right direction, many traders feel that the data needs to come off at a higher rate to influence the central bank.
The April employment data is expected to show a gain of 25k new jobs and for the unemployment rate to rise by another 0.1% to 3.9% and anything significantly away from these expectations should see fresh moves in the market.
The Aussie dollar is trading around 0.67 after seeing a good topside move overnight following the US CPI data release. It has so far topped out around the long-term resistance trendline on the daily charts, but a strong result today in the employment data could create the perfect storm for Aussie bulls and give it a clean break to see it challenge levels not seen since December 2023. Trendline Support is now sitting just under 66 cents where there is also substantial options interest, however given last night’s US data, expect dips to attract buyers as the dollar side of the equation should continue to dominate over the next few sessions.
