Daily Market Digest: Australia Unemployment, BoE Rate Decision

Market headlines

Australia unemployment rate rises to a 4-month high at 5.80%

Bank of England keeps monetary policy unchanged with interest rates at 0.50%

BoE signals further stimulus is required following its final assessment in August

UK PM Theresa May appoints Philip Hammond as the new Chancellor of the Exchequer, replacing George Osborne

US producer prices rise for the third consecutive month

Today’s Economic events

UK RICS house price balance 16% vs. 8%

Australia MI inflation expectations 3.70% vs. 3.50% previously

Australia employment change 7.9k vs. 10.1k

Australia unemployment rate 5.80% vs. 5.80%

Australia new motor vehicle sales m/m 3.10% vs. -1.0% previously

Switzerland PPI m/m 0.10% vs. 0.20%

BoE keeps interest rate unchanged at 0.50%

Canada NHPI m/m 0.70% vs. 0.20%

US PPI m/m 0.50% vs. 0.30%; core PPI m/m 0.40% vs. 0.10%

US unemployment claims 254k vs. 263k

Market Performance

FX Market Performance (12GMT, 14/07/2016)

Australia unemployment rate rises to 5.80%

Latest data from the Australian Bureau of Statistics showed that the unemployment rate rose to a seasonally adjusted 5.80% in June. The Australian unemployment rate was at 5.70% previously in May. On the month, the economy was seen adding 7,900 jobs lower than the forecasted 10k job estimate. The slower pace of job numbers follows May’s net job gains of 19,200.

Australia Unemployment Rate – July 2016 (5.80%)

Full-time employment hiring saw an increase of 38,400, while part-time jobs fell 30,600 during the month of June. The participation rate edged higher to 64.9% from 64.8%.

Commenting on the jobs report, ABS analysts said “the figures show that hours worked by employed people declined, but not by as much as in previous months. We are yet to see an increase in hours worked in 2016.”

Still, many believe that Australia’s unemployment report as understated. The ABS also acknowledged this in a note saying, “We were expecting a soft headline number today because the group being ‘rotated out’ had a much higher employment to population ratio than then the average of the sample. That is, the odds lay with the incoming group having a lower employment to population ratio than the group going out.”