Aussie Jobs Data Shows Underperforming Employment
AUD
The Australian Dollar (AUD) opens mixed against the majors this morning, reeling from the massive domestic job losses which counteracted the globally risk-on sentiment triggered by the US Fed's rate cut. The domestic ASX 200 index closed up 0.1%, but the Asian complex remained weak with the Shanghai Composite index down 0.7% and the NIKKEI down 0.9%. Focus remains intense on digesting the shock Australian employment figures, which saw a net job loss of -21.3K (missing the 20.0K forecast) and the Unemployment Rate holding at 4.3% (vs 4.4% forecast), heavily overshadowing all other news
USD
The AUD/USD cross opens lower at 0.6662, suffering a substantial hit from the severe weakness in the domestic labour market which completely eclipsed major action from the US. The equities market was mixed, with the blue-chip Dow Jones soaring 1.3% on the dovish news, while the tech-heavy NASDAQ slipped 0.3%. The primary global driver was the US Federal Reserve's major dovish shift, cutting the Federal Funds Rate to 3.75% (from 4.00%), a move reinforced by yesterday's disappointing Employment Cost Index (ECI) at 0.8% (vs 0.9% forecast), strongly suggesting that the Fed's easing cycle has decisively begun.
EUR
The AUD/EUR cross opens lower at 0.5678, struggling against a resilient Euro as the market focuses on the fundamental divergence between the two regions. European equities surged on the global rate outlook, with the DAX up 0.7% and the CAC up 0.8%, reflecting strong confidence in Eurozone growth. With no specific major Eurozone data overnight, focus shifts entirely to the sustained strength and relative stability of the Eurozone economy, ahead of upcoming ECB speeches that will clarify their response to the global easing trend following the US Fed's rate cut.
GBP
The AUD/GBP cross opens lower at 0.4977, primarily due to the sharp domestic AUD weakness from the job figures, despite the Pound being supported by a steady UK equity market. The FTSE 100 closed up 0.5%, providing decent positive equity momentum that prevented a steeper fall for the Pound. The market focus is currently on BOE Governor Bailey's ongoing speeches today for forward guidance on UK policy, ahead of tomorrow's key UK growth indicator, GDP m/m (Forecast: 0.1%, Previous: -0.1%), which will be critical for the Pound's short-term direction, especially if it indicates economic resilience.
NZD
The AUD/NZD cross opens virtually flat at 1.1476, reflecting unusual stability despite the significant volatility in the AUD/USD pair, keeping the Trans-Tasman relationship tight. There were no major data releases overnight for New Zealand, so the pair is reacting solely to the diverging fundamental pictures: the AUD's severe job losses (Unemployment Rate holding at 4.3%) versus the continued stability of the NZD. Focus remains squarely on the RBNZ's next moves and any potential further AUD weakness resulting from yesterday's shocking Australian employment numbers.