Strong employment data reduces chance of RBA November rate cut

RBA

The jobs data on Thursday from Australia was a good beat with full time employment figures increasing and unemployment levels falling. Eamonn reported at the time that shortly after the print Westpac (who see the next RBA rate cut in Feb 2020) saw this positive print as giving the RBA more time to keep rates on hold:

Westpac with their view on what the jobs data means.

• this month's modest decline in the unemployment rate will be temporary and emphasise we are still a long way away from the RBA's full employment aim of 4.5%. It does however allow the RBA some more time to monitor the economy before having to act again.

In an immediate reaction AUD was bid and I am expecting AUDNZD buyers on pullbacks. With no major data out of NZD until October 31 and CPI due out October 30th for the AUD, then AUDNZD should be supported into month end. The fly in that outlook is a breakdown in US-China pahse 1 talks which I expect to drag more heavily on AUD (due to Oz's close trade relationship with China) than NZD and would result in AUDNZD downside.