Strong Australian employment report (18 July)
The Australian employment report delivered jobs growth of +50.9K in June, well above 16.5K expected, and most of the gains were full-time; up 41.2K.
The data will probably not change the outlook for rates much given it comes after slower jobs growth Feb-May, and the unemployment rate was reported unchanged at 5.4%, in a stable range since Sep last year, but at the bottom of the range for a second month, and consistent with ongoing gradual improvement in the labour market. (it was a bit lower at 5.37%, vs 5.40% in May, a low since 2012).
The participate rate rose from 65.5 to 65.7, reversing falls in the previous three-months, below the peak in January of 65.8, but overall around record highs, seen last in 2010.
Overall a solid outcome, that balances the recent less strong outcomes since January, and will support the RBA view that the next move in rates is more likely to be a hike, albeit still some time away.
3yr bond yields have risen 4bp on the data and the AUD has risen 0.4% so far on the day, against a relatively stable NZD and other major currencies.
We were stopped out of our long EUR/AUD position.
(Chart 1: The unemployment rate at a low since 2012 in June, the quarterly under-utilization measures were not updated in June)
(Chart 2: Participation rate recovered some of its recent fall, still broadly around record highs last see in 2010)
(Chart 3: A rebound from recent softness in labour market growth)
Positions
Short half unit NZD/CAD at 0.8914; s/l 0.9013; t/p 0.8513
Short half unit NZD/CAD at 0.8914; s/l 0.9013; t/p 0.8513
Position closed on stop
Long half unit of EUR/AUD at 1.5824; s/l 1.5673; t/p 1.7234 ( stop executed at 1.56688, loss was 1.175% of capital)