When is the Australian employment report and how could it affect AUD/USD?

January month employment statistics from the Australian Bureau of Statistics, up for publishing at 00:30 GMT on Thursday, will be the immediate catalyst for the AUD/USD pair traders. The figures become all the more important as the Reserve Bank of Australia (RBA) recently conveyed its bearish bias on the jobs figures. Also, snap lockdowns in Melbourne offer extra light on the key Aussie data.

Market consensus favors Employment Change to drop to 40.0K from 50.0K on a seasonally adjusted basis whereas the Unemployment Rate is likely to ease from 6.6% to 6.5%. Further, the Participation Rate may remain unchanged at 66.2%.

TD Securities expect a mixed data while saying,

We expect headline employment to increase by 36k (market forecast: +30k) in Jan'21, extending the 50k rise in Dec'20. ANZ job advertisements continued to increase in Jan by 2.3% m/m, signaling healthy labor market demand. Moreover, the Jan NAB business survey points to higher capacity utilization and Capex investment which suggest businesses ramping up hiring as demand picks up. This should drive the participation rate higher to 66.3% in Jan from 66.2% previously and a decline in unemployment to 6.5% in Jan from 6.6% in Dec'20.

Additionally, analysts at Westpac said,

Business surveys have seen a very solid recovery in their employment indicators. However, weekly payrolls are pointing to a sizeable seasonal drop in early January. Due to the balance of risks, we have held our earlier forecast for a 10k rise in employment (median market estimate is +30k, range +10k to +68k). Since June 2020, headline employment has printed below consensus only once. Holding participation flat at 66.2% and continuing the current pace of growth in the working age population means a 10k gain in employment is enough to hold the unemployment rate at 6.6%.

How could the data affect AUD/USD?

AUD/USD fades the bounce off weekly low while taking rounds to 0.7750 during Thursday’s Asian session, ahead of the data release. The pair recently lost to the US dollar’s strength while ignoring the removal of lockdown measures from Melbourne. However, the latest fundamentals have been mixed concerning the Pacific major, which in turn keeps the AUD/USD bears hopeful ahead of the data. In its latest meeting, the Reserve Bank of Australia (RBA) marked sour conditions of the jobs at home while the Employment Change has been downbeat for the last three months. Hence, any further weakness in the data and the following drop of the AUD/USD can’t be ruled out. China’s return will be the key for the quote and hence surprises by the key job figures, if any, will gain extra strength if Beijing acts to add liquidity turn progressive on the Aussie-China tussle.

Technically, AUD/USD is into the nascent stage of forming a double top around 0.7806, which in turn directs the quote towards the 21-day SMA and an ascending support line from November 02, respectively around 0.7700 and 0.7650, before confirming the bearish pattern by breaking the 0.7560 key support. Meanwhile, the yearly top near 0.7820 adds to the upside filter.

Key Notes

AUD/USD: Corrective pullback to mid-0.7700s eyes Australian Employment data for fresh fuel

Australian Employment Preview: Solid jobs report to revive AUD/USD’s bullish momentum

AUD/USD Forecast: Australian employment data can save the aussie

About the Employment Change

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).

About the Unemployment Rate

The Unemployment Rate released by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. A decrease of the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).