FOREX: Labour Market Developments Swiftly Change Tide for AUDUSD
Jul-17 09:10
- The primary driver for AUD (-0.86%) underperformance overnight has been the weaker-than-expected jobs report. Jobs growth disappointed at just +2k (Est. +20k) and notably this was weighed by full time jobs falling by 38.2k. Furthermore, the unemployment rate rose to 4.3% (Est. 4.1%).
- Analysts have been quick to point out that a solid job market has been a key reason why the RBA has been patient thus far in easing policy, and the latest data will open the door wider to further rate cuts ahead. An August cut is now fully priced, while markets currently expect ~65bps of easing by year end. Sure enough, Nomura now expect 25bp cuts in Aug, Nov and Feb.
- On top of the jobs report, consumer inflation expectation also dipped in July to 4.7%, and the cautious tone surrounding the Trump-Powell spat may provide a headwind to higher beta currencies, even if the dollar were to come under renewed selling pressure.
- For AUDUSD, today’s move below the 50-day EMA (intersects at 0.6490) appears meaningful, and a daily close below this average would be the first in over three months, highlighting a stronger reversal. The initial target for the move would be 0.6435 (Fib retracement) before 0.6373, the Jun 23 low and technical bear trigger.
- One FX strategist at ANZ believes that in the near term there are risks around a further move lower for AUDUSD, also forecasting RBA easing in both Aug and Nov.
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GILT AUCTION RESULTS: Solid 5-year Gilt Auction
Jun-17 09:07
Solid 4.375% Mar-30 Gilt auction, with the 0.2bp tail the tightest on record for this line (compared with the five previous re-openings since January 2025).
- The bid-to-cover ratio of 3.26x was slightly above last month’s 3.23x and above the 3.13x prior average.
- Lowest accepted price of 101.322 was in excess of the 101.3115 pre-auction mid.
- The secondary market price of the Gilt started rising after the bidding window closed, and has continued to move higher since the results were published, now at 101.3390.
GILT AUCTION RESULTS: 4.375% Mar-30 Gilt
Jun-17 09:03
| 4.375% Mar-30 Gilt | Previous | |
| Amount | GBP4.50bln | GBP4.50bln |
| Avg yield | 4.060% | 3.977% |
| Bid-to-cover | 3.26x | 3.23x |
| Tail | 0.2bp | 0.4bp |
| Avg price | 101.330 | 101.721 |
| Low price | 101.322 | 101.704 |
| Pre-auction mid | 101.312 | 101.687 |
| Previous date | 07-May-25 |
MNI: GERMANY ZEW JUN ECONOMIC EXPECTATIONS 47.5
Jun-17 09:00
- MNI: GERMANY ZEW JUN ECONOMIC EXPECTATIONS 47.5
- MNI: GERMANY ZEW JUN CURRENT CONDITIONS -72
