Jobs Numbers Decline but Unemployment Rate Remains Steady
AUD
The AUD opens lower across the board after a soft jobs report yesterday. Australia's employment figures took a significant downturn in February, with a loss of 52.8K jobs which is substantially below expectations of a 30k increase in jobs. It also completely erases January's revised gain of 44k jobs. The observed decline in employment figures can be explained by a combination of factors: a reduced rate of older worker re-entry, a deceleration in full-time job growth, and widespread reductions in working hours, notably within wholesale trade, construction, and transportation. We also saw the Unemployment Rate come in on expectations and in line with previous readings of 4.1%, although Economists believe this will have little impact on the RBA’s next rate decision as bigger concerns stem from geopolitical tensions. Key trading partners China held their Loan Prime Rates as expected at 3.10% and 3.60% respectively. Asian equities finished lower across the board, Nikkei -0.3%, Shenzhen -0.9%, and Hang Seng -2.2%, whilst the ASX was up 1.2%. Commodities were mixed with the biggest movers being Natural Gas -1.8% and Crude Oil +1.6%. Next week the main piece of data is Australian yearly CPI which previously read 2.5% and is due out Wednesday.
USD
The AUDUSD opens down at 0.6303 after falling a percent from yesterday's open. The main driver being the Middle Eastern conflict coming off a pause as President Trump has placed new sanctions on Iran, adding to global risk sentiment. Regarding economic data, we saw the Philly Fed manufacturing index printed at 12.5 which was fairly better than expectations of 8.8, and unemployment claims came out on expectations of 223K. Equities saw a choppy session on Wall St. ultimately ending lower with the Nasdaq trading -.3%, the S&P 500 -.2%, and the Dow Jones unchanged approaching the final hour of trade. Looking forward to the next relevant piece of data which is due Tuesday where we will see the latest manufacturing and services PMIs out of the US.
EUR
The AUDEUR opens at 0.5805 after sliding lower by about 30 pips from yesterday's open There wasn't much significant data overnight as it was more local employment data which was driving markets. Overnight the German PPI m/m came in as expected at -0.2%. ECB's President Lagarde spoke before the Committee on Economic and Monetary Affairs of the European Parliament, although nothing of importance was mentioned. Regarding Equities we saw the DAX down -1.2% and the CAC down -0.9%. Moving forward, tonight we have the European Current Account which previously printed at 38.4B and early next week we have both French and German Manufacturing and Services PMI’s.
GBP
The AUDGBP opens at 0.4856, down -0.7% after an abundance of economic data and commentary being released overnight. Early yesterday evening we saw the amount of people claiming unemployment benefits in the UK increase by 44.2K, much higher than forecasts of a 7.9K increase. The unemployment rate remained unchanged at 4.4% on expectations. Most importantly the BOE held their official bank rate at 4.5% which was strongly expected, however the individual votes were slightly more hawkish than what was predicted. The main takeaway from the summary statement is that the committee seems to be increasingly nervous regarding inflation pressures however will continue to gradually cut rates with caution. This had little impact on the FTSE as it closed down -0.1%. On Monday they have their Flash Manufacturing and Services PMI which previously printed at 46.9 and 51.0 respectively.
NZD
The AUDNZD opens at 1.0946, gaining about 20 pips over the last 24 hours as markets partially retraced the losses from yesterday's stronger-than-expected NZ quarterly GDP number. This morning, we saw Kiwi Trade Balance come in at 510M much better than expectations of -235M. The week ahead is very quiet with no economic data due.