18 Feb 2016
Further room for AUDUSD downside as jobs data disappoints - BNPP
Economists at BNP Paribas, suggests that the Australia’s January labour market report was on the soft side, with employment falling around 8k versus expectations for a 13k rise, driven by a decline in full time employment.
Key Quotes
“The unemployment rate consequently pushed higher to 6%. Our economists, however, note the headline data weakness looks worse than the trend data (which is what the RBA focus on). So, today’s release is unlikely to be a game changer for the RBA in itself, but if we see further weakness next month the market could bring forward easing expectations.
We remain bearish AUDUSD targeting a decline to 0.67 by mid-year. In China, CPI inflation moved up to 1.8% y/y in January while PPI bounced to -5.3% y/y from -5.9%. Our economists note mild inflation give room for further monetary easing, but another rate cut looks unlikely for the moment, given that the PBoC will not want to undermine the recent welcome stability in the currency.”
Key Quotes
“The unemployment rate consequently pushed higher to 6%. Our economists, however, note the headline data weakness looks worse than the trend data (which is what the RBA focus on). So, today’s release is unlikely to be a game changer for the RBA in itself, but if we see further weakness next month the market could bring forward easing expectations.
We remain bearish AUDUSD targeting a decline to 0.67 by mid-year. In China, CPI inflation moved up to 1.8% y/y in January while PPI bounced to -5.3% y/y from -5.9%. Our economists note mild inflation give room for further monetary easing, but another rate cut looks unlikely for the moment, given that the PBoC will not want to undermine the recent welcome stability in the currency.”