Market News & Analysis

Top Story

Stronger jobs data boosts AUDUSD

Earlier this week we spoke about the scrutiny that today’s Australian labour force data for December would receive as well as its importance to the future direction of the AUDUSD and RBA cash rate. We also highlighted the misgivings of respected economic journalist Ross Gittins, shared by many others who believe additional RBA rate cuts will do more harm than good.

Today’s labour market data has temporarily put that debate on hold with the headline employment figures much better than consensus expectation. 28.9k new jobs were created in December vs expectations of 15k. The unemployment rate, the measure of labour market health I most closely follow, fell to 5.1% vs expectations of 5.2%.

Notably, the unemployment rate finished 2019 below the RBA’s own forecast of 5.2% and below its assessment from the December board meeting “The unemployment rate has been steady at around 5¼ percent over recent months. It is expected to remain around this level for some time….”

However, the details within the report were less impressive. A 29.2k increase in part-time jobs masked a small fall (300) in full-time jobs. A trend has been in place for some months now and has resulted in 51.k rise in part-time jobs since September while in the same period time full-time jobs have fallen by 8.0k.

Nonetheless, the resilience of the labour market has already seen a number of banks and the market unwind expectations for a February RBA cut. After being almost 60% priced earlier this week, the strong jobs report, the rise in housing sentiment in yesterday's consumer confidence index combined with the AUDUSD sitting contently below .70c has left just 25% of a rate cut priced for the February RBA meeting. A full rate cut is not priced until August 2020.

Pre the number, the AUDUSD was holding just above key support .6830 and has since recovered to be trading back near .6875. Because news on the Coronavirus is likely to get worse before it gets better, the AUDUSD is likely to be capped in the short term by the band of resistance .6880/00 that includes the 200 day ma (.6882) and the September high at .6895.

Source Tradingview. The figures stated areas of the 23rd of January 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.