11 Feb 2015
Australia: Labour data and RBA speakers in focus - RBS
FXStreet (Bali) - Attention in Australia will turn to the employment report on Thursday, RBA Assistant Governor Guy Debelle speech the same day, and RBA Governor comments to a Parliamentary Committee on Friday, notes Greg Gibbs, FX Strategist at RBS.
Key Quotes
"Attention in Australia will turn to the employment report on Thursday. Earlier that morning RBA Assistant Governor Guy Debelle will speak at an FX Week Australia conference. The venue suggests he may comment on the exchange rate. And on Friday, the RBA Governor fronts the Parliamentary Committee in his regular semi-annual hearing on monetary policy."
"In its quarterly Statement on Monetary, released on Friday, the RBA said, “A number of indicators suggest that, while employment growth has picked up over the past year, spare capacity in the labour market increased further over that period, consistent with below trend growth in the economy.”
“As growth in economic activity is forecast to remain below trend in the near term, the unemployment rate is likely to rise a little further over coming quarters. It is expected to decline towards the latter part of the forecast period [out to mid-2017], once growth picks up to an above-trend pace.”
"The RBA forecasts (based on eye-balling their chart) is for unemployment to rise gradually to around 6.5% (from 6.1% reported in December) and remain around this peak for most of 2016, before falling back to around current levels by around mid-2017). The non-inflationary neutral rate for unemployment is considered to be around or a bit above 5.0%. Current levels above 5.5% might be regarded as disinflationary and something the RBA should address."
"Their forecast for sub-trend growth over the coming year and a sustained further period of significantly above desired unemployment suggests it retains a bias to ease policy, subject to being satisfied it does not exacerbate financial stability by excessively pumping up house prices, and inflation remains under control (currently forecast to stay inside its 2 – 3 target band, notwithstanding the weaker AUD since mid-2014."
Key Quotes
"Attention in Australia will turn to the employment report on Thursday. Earlier that morning RBA Assistant Governor Guy Debelle will speak at an FX Week Australia conference. The venue suggests he may comment on the exchange rate. And on Friday, the RBA Governor fronts the Parliamentary Committee in his regular semi-annual hearing on monetary policy."
"In its quarterly Statement on Monetary, released on Friday, the RBA said, “A number of indicators suggest that, while employment growth has picked up over the past year, spare capacity in the labour market increased further over that period, consistent with below trend growth in the economy.”
“As growth in economic activity is forecast to remain below trend in the near term, the unemployment rate is likely to rise a little further over coming quarters. It is expected to decline towards the latter part of the forecast period [out to mid-2017], once growth picks up to an above-trend pace.”
"The RBA forecasts (based on eye-balling their chart) is for unemployment to rise gradually to around 6.5% (from 6.1% reported in December) and remain around this peak for most of 2016, before falling back to around current levels by around mid-2017). The non-inflationary neutral rate for unemployment is considered to be around or a bit above 5.0%. Current levels above 5.5% might be regarded as disinflationary and something the RBA should address."
"Their forecast for sub-trend growth over the coming year and a sustained further period of significantly above desired unemployment suggests it retains a bias to ease policy, subject to being satisfied it does not exacerbate financial stability by excessively pumping up house prices, and inflation remains under control (currently forecast to stay inside its 2 – 3 target band, notwithstanding the weaker AUD since mid-2014."