Australia Employment Lowers 2012.03.08

The Australian Bureau of Statistics Thursday reported the country’s employed persons decreased a seasonally adjusted 15,400 in February to 11,444,000 from January (2012). The amount fell below economists’ expectations of a 5,000 increase. Companies failed to add any additional full-time positions and lost 15,400 part-time positions.  The Reserve bank of Australia (RBA) stated that employment numbers are a key factor in determining changes to monetary policy as it left policy unchanged in a meeting earlier this week. Compared to February last year (2011) this February gained 0.2% additional employed individuals. Yet, unemployment numbers went up 2.7% or 16,400 to 632,200 with the unemployment rate increasing 0.1 points to 5.2%. To add to this, several manufacturing companies and banks have stated they will implement employment reductions this year. A couple of these include Holden and the Australian Zealand Banking Group. 

In other news, the Reserve Bank of Zealand (RBNZ) announced the country’s official interest rate will remain unchanged at 2.5%. The Governor of the RBNZ noted, “Inflation has settled near the middle of the Bank’s target range, and inflation expectations have fallen. The domestic economy is showing signs of recovery. Household spending appears to have picked up over the past few months and a recovery in building activity appears to be underway.” Furthermore, the country’s high commodity export prices are supporting the country’s domestic activity. As well, improvements in global economic conditions have increased sentiment in the global economic outlook eliminating near-term fears of deterioration.

The AUDNZD traded in 100 pip range yesterday. The pair rallied towards resistance at 1.2970 after the Zealand rate announcement but gave back all the gains when the Australian employment report was announced. The pair is currently testing support at 1.2880. If it breaks below this support level, we expect the pair to target 1.2850. 

Eugene Ross, Analyst

Admiral Markets

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