Australian dollar set to be rattled by the October jobs report

Photo by David McNew/Getty Images

Unperturbed by China’s weak data dump released late yesterday, something that revealed industrial production and urban fixed asset investment continued to slow in October, the Australian dollar stuck to familiar territory overnight, oscillating in a thin range between .7038 to .7070 throughout European and North American trade.

The US dollar, having rallied hard on Tuesday, softened fractionally, helping to offset mixed price action across the commodities complex. Of note, crude oil was smoked, losing close to 3% while the spot iron ore price bounced 0.7% to $48.58 a tonne.

As at 8.30am AEDT, the AUD/USD currently buys .7063, up around 0.4% on Wednesday’s opening level of .7029.

AUD/USD 5-minute chart Source:

While the Aussie stuck to familiar territory overnight, that’s unlikely to remain the case during Thursday’s trading session with Australia’s October jobs report, a notoriously volatile data release, set to rattle the currency one way or another.

That theme is picked up by David de Garis, senior economist at the NAB, in his morning note.

The local market will be fixated on this morning’s employment report for October at 1130am AEDT. Despite recent data validity issues, the labour market release is a significant market mover ranked in the top five as far as the AUD and short-dated yields are concerned,” notes de Garis.

“The market consensus is for employment to rise 15,000. NAB is forecasting a stronger 25,000 based on continuing positive leads from labour demand indicators, including as recently as Tuesday’s NAB survey employment index which remain steady at a positive +3. Even in the event of a larger rise in employment, this often comes with a bounce in the participation rate limiting the fall in the monthly unemployment rate. NAB is forecasting the unemployment rate to pull back from 6.2% to 6.1%.”

In September employment fell unexpectedly by 5,100, bucking expectations for an increase of 7,100. That’s symptomatic of the broader theme in the series, and means that there’s likely to significant market volatility in the immediate aftermath of the October release.

Here’s the current Aussie dollar scoreboard.

  • AUD/USD 0.7063 , 0.0034 , 0.48%
  • AUD/JPY 86.76 , 0.19 , 0.22%
  • AUD/CNY 4.4972 , 0.0265 , 0.59%
  • AUD/EUR 0.6575 , 0.0021 , 0.32%
  • AUD/GBP 0.4641 , -0.0008 , -0.17%
  • AUD/NZD 1.0760 , -0.0006 , -0.06%

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