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Australian jobs data up next - Westpac

FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, notes that their central scenario is for +25k in today's Australian total employment number, just ahead of the median forecast of +20k.

Key Quotes

After the release of revised data on Tuesday, we at least have a firmer starting point for Australia’s Oct labour force data (11:30am Syd/8:30am Sing/HK). The ABS now says total employment dipped -9k in Aug and a further -24k in Sep. This is rather soft for an economy (presumably!) still growing around a 2.5% pace so a rise in jobs seems likely. Westpac looks for +25k, just ahead of the median forecast of +20k. This is probably not enough to cut the unemployment rate however. Sep unemployment was revised up to 6.2% from 6.1%. This is the highest jobless rate since 2002. We forecast a lift in the participation rate from 64.5% to 64.6%, leaving the unemployment rate flat at 6.2%, in line with consensus. We see risks of a surprise tilted to the upside on employment but about balanced on unemployment. As ever, there is plenty of event risk for AUD in the report despite all the new information from the ABS this week.

Asia’s calendar is limited to the late session policy announcement from Bank Negara Malaysia, expected on hold at 3.25%. Germany releases Sep factory orders, seen up 2.2% m/m after the stunning -5.7% slide in Aug, which might have had some special factors in play as well as an underlying trend deterioration. In the UK we will see Sep industrial production, expected up 0.4% m/m, 1.6% y/y. This probably poses more risk to GBP than the Bank of England policy decision later in the day, given that a steady hand is assured and very rarely is a statement released when policy is unchanged.

The London session highlight of course is the ECB meeting. Interest rates are sure to be kept at 0.05% on the refi rate and -0.2% on deposits. But the press conference 45 minutes later should be very lively indeed. The newswire story about strong dissent within the ECB Governing Council suggests it will be very tough for agreement to be reached on new easing measures. But Draghi has enjoyed a lot of market credibility in recent years so should be keen to assert his authority. He will also not want to give investors a reason to buy EUR after welcoming its fall since mid-year.

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