Australian Employment Figures Stronger
- Employment Change released
- Unemployment Rate released
The Australians released employment figures early on Thursday, which has a major influence on what happens with the Australian stock markets and the Australian dollar itself. The market is likely to see a lot of volatility, as there are multiple things hanging over the head of the Australian economy, most of which are far beyond its own control.
Ultimately, the market will continue to be very noisy. Even though there is good news it’s difficult to imagine that things are simply going to start rallying in Australia without other factors coming into play.
The Employment Change coming out of Australia for the month of November ended up being 39,900 which is much larger than the 14,500 expected. There was a revision to the previous month, showing a loss of 24,800 jobs instead of a loss of 19,000 at the time of the release. The Unemployment Rate came out at 5.2%, better than the 5.3% expected. There was no revision from the previous month, and the Americans and the Chinese have somewhat agreed to a potential deal. This is likely to have a reasonable effect on risk appetite. Until there is complete clarity, these numbers will only be somewhat bullish.
Technicals and external pressure
Looking at the charts, the Australian dollar has been a bit more bullish as of late. It has made a series of “higher lows”, perhaps in anticipation of the Americans and the Chinese coming together finally. This is a market that is going to continue to be very beholden to the next headline, which in the short term probably won’t be coming. There were little blurbs about the Americans and the Chinese getting together via phone conversation to talk about the signing procedure, but at this point details still remain very light. Because of this, the gains in Australia via equities or even the currency will be somewhat limited. With the holidays around the corner, it’s very difficult to imagine a scenario where the market simply takes off with abandon.
The main take away
The main take away out of the Australian employment figures suggests that although they show signs of strength in Australia, there are far too many external issues for Australia to simply be bought into “hand over fist.”
Plus, the export-heavy economy is a massive producer of goods for the rest of the world. If there can be a bit of a move forward and not only the Americans and the Chinese, but perhaps a little bit of global growth, that should help the Australian dollar as well. Longer-term, Australia sets up as a candidate for bottoming out.