Australia: Great news continues for employment - TDS

Australia’s June employment increased by +14k, not the blockbuster that TDS were expecting, but the report was solid as fulltime employment expanded by another +62k, such that every net job created so far this year was full-time (35+ hrs/wk), explains the research team at TDS.

Key Quotes

“The unemployment rate ticked higher to 5.6% as the participation rate rose to 65%, as TD expected.”

“Governor Lowe speaks next Wednesday on “The Labour Market and Monetary Policy” and we expect him to remark that spare capacity in the labour market is being rapidly absorbed. As we wrote yesterday, wages growth is poised to reach 2½%/yr by Sept qtr this year.”

“In the meantime, all eyes on RBA Dep Gov Debelle’s Adelaide lunchtime speech tomorrow. He could not have anticipated this bullish shift in market sentiment heading into this speech. As Debelle is the BIS FX specialist, plus the audience will be filled with (wine) exporters, he will be asked about the exchange rate. While he is likely to just repeat the Bank’s party line that “an appreciating currency is unhelpful” we expect that phrase to be widely interpreted as jawboning. Subsequently, we may have seen the highs for the AUD for now given the rapid unexpected appreciation so far this month.”