AUD spikes on strong jobs data, markets reprice RBA rate cut expectations – TradeTheNews

FXStreet (Barcelona) - The TradeTheNews Team comments that the upbeat Australian employment data led markets to decrease the expectations for a rate cut next month, boosting the AUD, while Barclays noted that this might lead to a surprise rate cut by the RBA.

Key Quotes

“On the day when the greenback was already under heavy pressure against the higher yielding commodity currencies, a particularly strong employment report from Australia has sent AUD/USD up about 70pips to a 2-week high of $0.7780.”

“While the data series has been volatile, analysts note that the minimal seasonal adjustment in this month's figures implies the perception of labor market malaise may have been overstated.”

“Participation rate uptick to an 8-month high of 64.8% is also impressive.”

“Going into the release, fixed income markets priced in about a 70% chance of an RBA rate cut next month, but after the announcement, that probability has slid to about 56%.”

“Analysts with CBA noted the focus will now shift to next week's quarterly inflation data to sway the RBA bias, but Barclays said the bullish response to these figures from AUD could actually sway the central bank to pressure the currency with a surprise cut.”

“Australia March employment change: +37.7k v +15.0ke; unemployment rate: 6.1% (3-month low) v 6.3%e; participation rate 64.8% (8-month high) v 64.6%e”

“Australia March consumer inflation expectation: 3.4% v 3.2% prior”

“Australia March new motor vehicle sales m/m: 0.5% v 2.9% prior; y/y: 4.4% v 4.1% prior”