At 0100GMT we get Melbourne Institute Consumer Inflation Expectations from Australia for June.
The report is issued monthly. Consumers are asked whether, and by how much, they believe prices will change over the coming 12 months
- The prior result was 2.3%
Then, an important market focus, Australian employment data to be released at 0130GMT
- Employment change: expected is -10,000, prior was +50,100 (this data point has been very volatile in past months)
- Unemployment rate: expected is 5.6%, prior was 5.5%
- Full time employment change: prior was +34,500
- Part-time employment change: prior was 15,600
- Participation rate; expected is 65.2%, prior was 65.3%
The ‘Employment Change’ figure is the big one, the point of most focus. It has been extremely volatile the past few months, so if it comes out far removed from market expectations, its both a surprise and not a surprise, if you know what I mean. Check out the last three results in this graph:
The Reserve Bank of Australia are wanting to see growth in employment continue. A surprise to the downside today on employment is going to shift forward market expectations of a rate cut and will be further bearish for an Australian dollar that is already in a weakening trend (past few days notwithstanding – some good bounces). A surprise to the topside, on the other hand could well see the RBA on hold for longer still (of course, other data points and information ahead of the next meeting are a consideration too).
For AUD/USD, chart support around 0.9330 and resistance 0.9560 area initially. I’ll have more on levels and orders as we approach the release.
For AUD crosses, Japanese news, impacting movements in the Nikkei, JGBs and therefore USD/JPY and thence yen crosses are all going to have an effect. Fed ‘taper’ speculation. An improving UK economy (seemingly) and a euro that thats showing support … there are a lot of cross-currents at work. Think I’ll confine my thinking to AUD/USD for the time being. Comments on levels and timings on AUD cross trades are, of course, welcome.
