Employment Figures Give the AUD a Boost, with Brexit and Italy Still in Focus

Earlier in the Day:

Economic data released through the Asian session this morning was limited to October employment numbers out of Australia.

For the Aussie Dollar, October labour figures impressed in the early part of the Asian session, with better than expected hiring through the month. According to the ABS,

• The number of employed rose by 32.8k in October, coming in well ahead of a forecasted 20k increase, following September’s upwardly revised 7.8k rise.
• Full employment rose by 42.3k in the month, following an upwardly revised 24.6k increase in September.
• The unemployment rate held steady at 5.0%, which was better than a forecasted rise to 5.1%, with the participation rate rising from 65.5% to 65.6%, another positive from the numbers.
• Part-time employment fell by 9.5k in the month to continue supporting the shift in labour market dynamics. Year-on-year, full-time employment has increased by 238.8k, while part-time employment has risen by just 69.4k.

The Aussie Dollar moved from $0.72330 to $0.72677 upon release of the figures, before rising to $0.7269 at the time of writing, a gain of 0.51% for the session.

Elsewhere, the Japanese Yen was up 0.05% to ¥113.57 against the U.S Dollar, with the Kiwi Dollar down 0.13% to $0.679, in what’s been a relatively benign start to the day, leaving the equity markets mixed early on, the Nikkei and ASX200 in the red, while the Hang Seng and CSI300 opened in positive territory.

The Day Ahead:

For the EUR, economic data is on the lighter side, with key stats limited to 2^nd estimate GDP numbers for the 3^rd quarter out of France and September trade data out of the Eurozone.

While we can expect some focus on the stats, geo-political risk will continue to be the key driver through the day, as the Italian coalition government stands firm on its 2019 spending plan and deficit target of 2.4%.

Italy’s debt as a percentage of GDP sits at 131%, second only to Greece, though with Italy being the Eurozone’s 3^rd largest economy, it’s not completely surprising that there is panic within the Establishment’s ranks, the Italian coalition government in a position to make a much bigger dent into the EURO project than Greece was ever able to.

At the time of writing, the EUR was up 0.04% to $1.1315.

For the Pound, it’s another important day on the data front, with key stats scheduled for release including October retail sales figures that will give some idea of how the UK economy is fairing going into the final quarter of the year.

As with the rest of the key stats through the week, we will expect Brexit to overshadow the numbers, key through the day being political support for the draft deal.

At the time of writing, the Pound was flat at $1.32992, with Brexit news the key driver through the day.

Across the Pond, economic data is on the heavier side, with stats scheduled for release including October retail sales figures, November manufacturing PMI numbers out of NY State and Philly and business inventory numbers. Of less significance will be import and export price index figures for October, as the markets look for signs of a slowdown in domestic consumption that could pin back the FED and its plans on driving beyond policy normalization.

Outside of the numbers, we can expect geo-political risk to continue to influence through the day.

At the time of writing, the Dollar Spot Index was up 0.2% to 96.992, with today’s stats, Capitol Hill and geo-political risk in focus through the day.

For the Loonie, the markets will need to hold on until tomorrow’s manufacturing sales figures for September, though it’s will likely continue to boil down to risk sentiment and the direction in crude oil prices that have weighed this month.

The Loonie was down 0.03% to C$1.3246 against the U.S Dollar at the time of writing, with crude oil prices continuing to be the key driver through the day.