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Markets no longer expecting a big drop in Aus jobs - Westpac

FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, notes that markets are no longer expecting a big headline drop in today's Australian jobs report, given the ABS announcement yesterday, but a moderate gain.

Key Quotes

"Australia’s employment statistics have bordered on farce lately so there will be extra tension on AUD for the Sep report (11:30am Syd/8:30am Sing/HK). Yesterday’s bombshell from the ABS caused a wave of revisions to forecasts. The ABS announced that the previous seasonality of Jul-Aug-Sep was not evident in 2014 so they were dropping the seasonal factors that boosted Aug and cut Sep and would report the seasonally adjusted data (the one that moves the market) as in line with the original (raw) data. Hence Aug is no longer a staggering +121k but a much more plausible +32k (and July was trimmed to -12k)."

"With this much lower – and far more plausible – starting point, markets are no longer expecting a big headline drop in jobs but a moderate gain. The median on Bloomberg is +15.5k (Reuters +20k), with Westpac more optimistic on +25k. We look for the participation rate to drop to 64.8%, helping cut the unemployment rate to 5.9% from 6.1%. This would be the lowest jobless rate since May. Given a median forecast of 6.1%, this should be worth at least +30 pips on AUD/USD."

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