Australian Employment Below Forecast

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Australian Employment Below Forecast

Australian Employment Below Forecast In October

The employment data from Australia was below forecast during October. However, the unemployment rate remained unchanged which is a sign of labor market's resilience.

For now, it seems to be a non-event, as the market's reaction was muted after the release of the data. The AUD/USD is trading near 0.6494 with little change. Meanwhile, the 3Y bond futures are trading at 95.79 with +1 tick change.

Rba To Cut Rates From Next Year

According to the market's forecast, the first rate cut in Australia will likely happen in May/July 2025. That's a lot of months and one of the reasons behind the strength of AUD.

The data showed that 15,900 new jobs were created in October. This was one of the smallest increases in the last 7 months and was below the forecast of 25K. On an annual basis, the job growth is steady at 2.7% which is one of the good things from this data.

As for the jobless rate in Australia, it remains near 4.1%, with no change since June 2024. However, the participation rage has moved from 67.2% to around 67.1%.

The RBA also appears to be content and has not lowered the policy rate for almost a year now. In Australia, the interest rate is 4.35%, while the inflation target is set at 2% - 3%.

According to experts, the labor market is still very strong in Australia, with little to no chance of a rate cut in the near term. According to RBA, the restrictive monetary policy will remain in place until inflation goes down.

Headline inflation, which is also a key metric, has dropped to 2.8% during the Q3. However, that has to do with the electricity rebates offered by the government.

At the RBA's December meeting, there's only a 10% chance of a rate cut, which is very slim. However, there's a 28% chance that the RBA will cut rates in February.

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