Australia employment grew 13.5k in January, better than expectation of 10.0k. Full time jobs rose 46.2k while part-time jobs dropped -32.7k. But unemployment rate surged to 5.3%, up from 5.1%, worse than expectation of 5.1%. Participation rate rose 0.1% to 66.1%.
The surge in unemployment rate somewhat deviates from RBA’s expectation that it will stay in 5.00-5.25% range for some time before falling to 4.75% in 2021. Also, it has to be considered that the impact of coronavirus outbreak in China hasn’t been reflected there. There is risk of a sudden spike in the data of the coming months. Today’s data adds much weight to the case for RBA to finally deliver another rate cut in April, after much hesitation.
Aussie bearish also finally make up their mind in selling it through key support level against both Dollar and Canadian. AUD/CAD’s strong break of 0.8835 support this week confirms resumption of long term term down trend. The cross is kept comfortably below falling 55 week EMA, which affirms bearishness. Next downside target will be 100% projection of 1.0241 to 0.9105 from 0.9775 at 0.8639.