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Forex Flash: Australian employment surprises again - Nomura

FXstreet.com (Barcelona) - Nomura economists note that the Australian economy lost 36.1k jobs in March, much worse than consensus expectations of a 7.5k increase

They see that this follows an upwardly revised 74k gain in February. They write, “As a result of the decline in employment, the unemployment rate increased to 5.6% from 5.4%, the highest level since November 2006, while the participation rate fell to 65.1% from 65.3%. Most of the job losses were in part-time jobs (-28.7k). The total number of hours worked was down 0.3% m-o-m as a result of the lower level of employment.”

They see that the data shows that most of the job losses in March were in Victoria, Queensland, Western Australia and Tasmania, while there were gains in New South Wales. However, there is a big discrepancy between the sum of the seasonally adjusted changes in employment by state (a loss of about 20k) and the headline number. They note that a similar discrepancy can also be seen in the February numbers, where the headline number was about 40k higher than the sum of state-by-state increases.

Overall, they view this report as a correction after the unexpected strength in employment in February. Nevertheless, the economy has created about 50k jobs in Q1, which is much stronger than the economic performance over the period would suggest. As such, they expect further under performance in the labour market over the next few months. The report does not change their view that the Reserve Bank will retain its easing bias.

They finish by writing, “The Australian rates market rallied to session highs (8bp) on the released of the employment number. While the headline employment number was greeted with skepticism following the strong rise last month, the higher unemployment number cements for some the anecdotal weakness in jobs and also reflects risks to positioning. AUD/USD dipped around 5 pips to 1.0510.”

Forex Flash: Japanese delusions - Societe Generale

Sebastien Galy, Senior FX strategist at Societe Generale notes that Japanese names ended up being net sellers of foreign bonds, rather than buyers as expected.
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Commodities Brief – Precious metals hold amidst FOMC indecision, crude rally snapped

Gold prices experienced a stark fall during US trading yesterday following the FOMC leak Wednesday. Indeed, the Federal Reserve should start cutting back on purchases of housing bonds as soon as its next meeting, one top Fed official said on Wednesday, just hours after another said talk of trimming the central bank's bond buys was "premature." These divergent views however, the former from inflation hawk Dallas Fed President Richard Fisher and the latter from policy centrist Atlanta Fed President Dennis Lockhart, are emblematic of a split also on display in minutes of the Fed's latest policy-setting meeting. During European trading today, the yellow metal has stuck to a normal consolidation, as the 1561 level proved to be the extent of any recovery. In these moments the price of gold now trades at USD $1558.21 per oz. Ultimately, prolonged stability between the 1570 is bearish for gold, with an intraday bearish bias below this figure.
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