When is the Australian employment report and how could it affect the AUD/USD?
Australian employment report overview
The Employment Change report for the month of Oct, released by the Australian Bureau of Statistics, is expected to show steady numbers, with the unemployment rate unchanged at 5.5%, the participation rate at 65.2%, while total employment change is seen at 17.5k vs 19.8k last. The variations in full-time/part-time employment will be a key determinant of the AUD price swings. Australia has had a solid run of positive job numbers in the last semester.
How could affect AUD/USD?
Sean Callow, Westpac's senior currency strategist notes: "Australia’s busy data week concludes with Oct labour force (11:30am Syd/Mel). Total employment surged 371k or 3.1% over the year to Sep 2017, a pace so rapid that it implies negative productivity growth. Such strength should mean at least a statistical correction at some point. But Westpac’s +20k forecast is in line with consensus, with indicators such as job advertisements and business surveys still positive. The unemployment rate is expected to hold at 5.5%, a low since Feb 2013."
Looking at the AUD/USD's recent price action, the beta currency continues to be dragged down as prospects of higher global yields + USD recovery weigh on the pair, with a close sub 0.76 resulting in yet another bearish technical outcome. That said, the latest round of selling on Wed was not accompanied by new low on the AU vs US 10y yield spread, with the addition that the AU vs US yield curve has been recovering steadily since early Nov. Aus job numbers are the next catalyst for prices.
From a purely technical perspective, Valeria Bednarik, Chief Analyst at FXStreet, notes: "Disappointing numbers are set to boost the dominant bearish trend. Technically, the 4 hours chart shows that the price is well below a bearish 20 SMA, while technical indicators remain steady ear oversold readings, with the RSI indicator heading marginally lower around 34, leaning the scale towards the downside. Anyway, the upcoming direction will be set by the above mentioned macroeconomic releases."
About the Australian employment report
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).