RBA rate cut in April is still live, but here's why May might be a better chance
TD response to the employment market report for Australia in January
The data and more ICYMI:
- Australian unemployment rate 5.3% (vs. 5.2% expected & prior of 5.1%)
- Australia 'trend' labour market numbers are a little steadier
- Responses to the AUD jobs report out earlier: "calls into question the RBA's optimism"
TD (in very brief from a their client note):
Today's jobs number on its own does not force the RBA to deliver a cut as early as next month. The RBA did indicate the unemployment rate would need to deteriorate 'materially' for it to cut. The next employment report is on 19th March and an unemployment number closer to 5.5% would fit the bill for the RBA to possibly cut in April.
- So far the RBA has indicated the hurdle to cut is high. The risk to our view then is that the RBA may prefer looking past Q4 GDP (4th March) and the 19th March jobs report and wait till the May meeting to cut. By then the RBA will have two job reports (enough to rule out month to month volatility) and the CPI report on 29th April in hand ahead of its May meeting.