Talking Points- The Australian Dollar gained more than 0.6% versus its US namesake.
- The country added more jobs than expected, Chinese CPI also released.
- Government bond yields reflect decreased RBA rate cut expectations.
The Australian dollar gained more than 0.6 percent versus its US counterpart after August’s employment data crossed the wires. Economists were expecting the country to add 5K jobs in the month of August; actual figures topped expectations at 17.4K jobs added. Most of the jobs gained came from the full-time figures (+11.5K). Australia added 5.9K part-time jobs in August. The unemployment and participation rate remained unchanged at 6.2 percent and 65.0 percent respectively.
Last week, the Reserve Bank of Australia maintained a data-dependent monetary policy outlook. Indeed, Australian front-end government bond yields climbed as the data was released. This suggests that today’s labor force data likely decreased RBA rate cut expectations in the near-term.
Simultaneously, China released its CPI figures for August. The data came in at 2.0 percent (YoY) versus 1.8 percent expected. Economic news flow out of China, Australia’s largest trading partner, can produce a spillover effect on the Aussie. However, domestic data appeared to overshadow Chinese news flow in the markets interpretation of RBA monetary policy direction. In other words, today’s positive employment figures took the spotlight with Chinese CPI having little impact on the AUD/USD.
