When is the Australia unemployment rate and how could it affect AUD/USD?
|April month employment statistics from the Australian Bureau of Statistics, up for publishing at 01:30 GMT on Thursday, will be the immediate catalyst for AUD/USD. The jobs report gains additional importance while being for the coronavirus (COVID-19)-led lockdown period.
Market consensus favors Employment Change to decline to -535.0K from 5.9K on a seasonally adjusted basis whereas the Unemployment Rate is likely to surge from 5.2% to 8.3%. Also, the Participation Rate may drop to 65.2% from 66.0% prior.
Westpac follows the suit of downbeat expectations while saying:
ATO payroll information has indicated that close to 1 million workers have already been rendered inactive. The main question is how this will translate into the official statistics given classification differences. Westpac expects a -450k fall in seasonally adjusted employment. The Bloomberg survey finds a range of -1,000k to -125k with a median of -575k. Westpac looks for the unemployment rate to spike from 5.2% to 8.3% (median 8.2%), participation down sharply to 65.3%. Underemployment should show a much bigger jump.
TD Securities also remains supportive of the market consensus while saying,
Australian Labour force data for April should reflect the full impact of the COVID-19 shutdown, which was not the case for the Mar data. The latest timely ABS data suggests close to 1m may have dropped off the payroll, but what complicates the issue is that those receiving Jobkeeper payments are likely to be considered employed. The market is bracing for a near 600k drop, we pencil in a -500k. The participation is likely to drop, that said, the unemployment rate should spike. The market is at 8.2%, we expect a figure 8% or above.
How could the data affect AUD/USD?
Given the survey period comprising the time when the virus hit economic brakes, the downbeat figures are bound to arrive, which in turn can cause immediate declines of the AUD/USD. Even the RBA has acknowledged that the Australian economy is going through a very difficult period and there is considerable uncertainty about the outlook. The central bank also predicted, in its quarterly Statement of Monetary Policy, the Unemployment rate to peak to 10.0% in June and 7.5% for 2021. Though any positive surprise will be responded with zeal and can push the Aussie pair towards challenging the monthly top.
Technically, sellers keep lurking around 100-day SMA, currently near 0.6525, while the monthly top around 0.6560/65 adds to the upside barrier. Should there be a clear run-up past-0.6065, March month top close to 0.6690 will flash on the bulls’ radars. Meanwhile, a confluence of a three-week-old ascending trend line and 21-day SMA near 0.6420/25 keeps the short-term declines limited, a break of which can drag the quote to the previous week’s low surrounding 0.6370.
Key Notes
AUD/USD remains on the back foot below 0.6500, Aussie jobs report eyed
AUD/USD Forecast: Turning bearish ahead of Australian employment data
AUD/USD Forecast: Good as gold? Global gloom could overwhelm even robust Australian figures
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).
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