CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

AU Employment In Full Focus For AUD Traders Tomorrow

Article By: ,  Financial Analyst
June 12, 2019 2:57 AM

Tomorrow’s employment set could prove to be a volatile affair for Australian markets, as it could be seen as a proxy for how soon or how many times RBA are to cut in this cycle, depending on the unemployment rate.

RBA cut rates to a historical low at their June meeting and, whilst the statement remained fairly neutral, Lowe commented later that the RBA could lower rates similar to UK or Canada ‘if we have to’. He also reiterated what the statement highlighted; the RBA are closely watching employment data, adding that the RBA expect inflation to rise if unemployment can lower to 4.5%. That could be a big ask, given unemployment rose to an 8-month high in May. Therefore, it could go without saying that unemployment is the key metric to watch in tomorrow’s employment report.

According to the ASX30 day interbank cash rate futures, markets are pricing in a 50% chance of an RBA cut in July. We’d expect this to pick up materially if unemployment were to rise to 5.3% or above. That said, expectations work both ways, so a steady or lower unemployment rate tomorrow would likely be bullish for AUD/USD (at least over the near-term). Furthermore, markets are also pricing in around 113% chance of a cut in September, and over 100% chance of two cuts by May 2020. Of course, with so much certainty of further easing already prices in by markets, it leaves potential for quite a bullish bounce if data improves whilst the Fed look to ease themselves.


  • AUD/USD has failed to close above 70c after 4 sessions failed to hold above it
  • We can see on the AUD/USD daily chart that its testing its retracement line from the May lows.
  • We remain bearish below 0.7022: The bearish engulfing candle at the 78.6% Fibonacci level raises the prospect that the corrective high may have been seen.
  • Over the near-term, 0.6938 is a pivotal level and we also have US CPI data later today which could move AUD either side of this key level ahead of tomorrow’s employment set.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024