MNI EXCLUSIVE: China Economists Share Outlook On PBoC's CGB Operations

Thursday September labour market data print and Bloomberg consensus expects employment to rise 20k with the unemployment rate up 0.1pp to 4.3% but the participation rate steady at 66.8%. The August data disappointed falling 5.4k but unemployment was steady at 4.2% and underemployment moderated further. RBA Governor Bullock pointed out that the jobs data are volatile and that it is best to look at 3-month or quarterly averages. This release will round out Q3.

• Employment forecasts are between 10k and 45k with most 18-25k. The Q3 average would be 13.7k if jobs grow by consensus’ 20k down from Q2’s 31k but above Q1’s -3.8k.
• AMP is at consensus while ANZ is below forecasting +10k and Macquarie above at +25k.
• Unemployment rate projections are within a narrow range of 4.2-4.4% with 8 economists projecting 4.2%, 16 4.3% and 1 4.4%. A 4.2% or low 4.3% would result in the Q3 average holding at 4.2%.
• CBA and Macquarie are forecasting 4.2% while ANZ, NAB, Westpac and AMP all expect a 0.1pp increase to 4.3%.
• The RBA looks at other indicators in the release to gauge labour market conditions including underemployment, which has been trending lower, and hours worked, which have been slowing. The youth unemployment rate is another series to monitor, which picked up in June. 

• RES 4: 1.1919 High Sep 17 and a bull trigger
• RES 3: 1.1820 High Sep 23
• RES 2: 1.1779 High Oct 1 and a key short-term resistance  
• RES 1: 1.1672 50-day EMA  
• PRICE: 1.1625 @ 06:17 BST Oct 15
• SUP 1: 1.1542 Low Oct 9
• SUP 2: 1.1516 76.4% retracement of the Aug 1 - Sep 17 bull leg 
• SUP 3: 1.1392 Low Aug 1 and bear trigger 
• SUP 4: 1.1313 Low May 30

EURUSD is in consolidation mode. A bear mode remains in place following the recent breach of the 50-day EMA and a support at 1.1646, the Sep 25 low. This signal scope for a test of 1.1516, a Fibonacci retracement. Note that moving average studies are in a bull-mode position. This continues to highlight a dominant medium-term uptrend, suggesting the move down is likely a correction - for now. Initial firm resistance is 1.1672, the 50-day EMA.