Big AU jobs print impacts ASX200

In Tuesday's article on the AUDUSD, the risk of higher volatility from today’s Tier 1 data doubleheader - the FOMC meeting and the release of August Labour Force data for the Australian economy was noted.

Charts (4)

While the FOMC meeting came and went mostly as expected, it’s been a different story following the release of Australia jobs data that was so far beyond consensus expectations, some mild scepticism could be excused.

Due to the ongoing lockdown in Victoria and July’s +114.7k increase in jobs, the expectation heading into today’s jobs data was for a -40k fall in jobs. Although pointed out in Tuesday’s article because of the methodology variation between the payroll and ABS survey measures, a +40k print wouldn’t have surprised either.

To settle the argument, it was suggested to focus on the unemployment rate, that was expected to increase from 7.5% to 7.7%, its highest level since 1998.

In an unexpected twist, employment increased by another +111k in August and the unemployment rate dropped from 7.5% to 6.8%!

Taking some gloss off the headline number, part-time jobs accounted for +74.8k of today's gains. Nonetheless, many of the jobs lost during April and Mays lockdown appear to have returned.

The implications of this are that the Australian economy continues to do better expected, and with households sitting on a large pile of savings, it reduces the urgency for the RBA to consider and implement “further monetary measures” it mentioned in its last Board meeting.

The prospect of less stimulus from the RBA hasn’t been particularly well received by the ASX200, already on the back foot this morning, with iron ores 10% pullback from recent highs weighing on the big miners.

Not helping either, a sell-down in U.S equity futures as hopes of a 4th U.S. stimulus package before the November 4th election, continue to recede.

Technically, the ASX200 remains within a range between 6200 and 5800/5700, a range that has been in place since early June. Should todays sell-off continue, the preference is for the ASX200 to again find support at the bottom of the range, before a recovery towards 6600 into year-end.

Keeping in mind, should the ASX200 see a sustained break below 5700, the initial downside projection is 5400.

Big AU jobs print impacts ASX200 

Source Tradingview. The figures stated areas of the 17th of September 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.