• Australian employment report beats estimates with a huge jump seen in labour force participation
  • China’s central bank lifts some interest rates in response to a hike seen in the FED
  • NZ dollar lower following the updated budget delivered by the new Labour-NZ First government

When the dust after the Federal Reserve meeting already settled it’s worth paying attention to some interesting macroeconomic data which came from the Asian economies overnight. First and foremost, the Australian dollar is gaining the most in response to the stunning labour market report outpacing forecasts in terms of an employment change.

link do file download linkThe latest increase in employment has been mainly driven by full-time jobs. Source: Macrobond, XTB Research

Overall, employment grew as much as 61.6k in the past month while the consensus had pointed just to 19k. Furthermore, the prime contributor to this growth came from full-time employment which increased 41.9k well more than expected. On the other hand, part-time employment picked up 19.7k against grim forecasts suggesting a 23.2k slid. It isn’t the end of rosy numbers as the labour force participation rate rose from 65.2% (revised up from 65.1%) to 65.5% whereas neither changes had been anticipated. What’s more the jobless rate stayed unchanged at the same time pointing to a qualitative improvement seen in the Australian labour market as more people entered the market.

Looking beyond the Australian economy one needs to spot that the Chinese central bank chose to inject some liquidity via MLF operations (288 billion yuan in 1Y-transactions). The PBoC raised also rates: MLF by 5 basis points to 3.25% and 7-day reverse repo by 5 basis points as well to 2.5%. The bank said in its statement that an injection was aimed at meeting seasonal liquidity demand at financial institutions. In turn rate hikes were a natural response to another hike delivered by the US central bank on Wednesday. In addition the Chinese economy published its set of November data which proved to be more or less in line with forecasts. Industrial production grew 6.1% yoy (exp. 6.1%), fixed assets investments excluding rural showed 7.2% yoy YTD (exp. 7.2%) while retail sales came in a notch lower than forecast (10.2% yoy vs. 10.3% yoy).

link do file download linkAs a result, the Australian dollar is the best performing currency in the G10 bast in the morning being up 0.4% against the greenback. Technically the AUDUSD managed to break above an upper boundary of a channel and therefore a continuation of rises could be on the cards. If so one may second-guess that bulls could go toward 0.7755 where the first crucial resistance in located. Source: xStation5

Moving on, the NZ dollar got a blow from the new government which updated a budget. According to the statement the budget surplus in 2018/2019 is seen at 2.828 billion NZD compared to 3.52 billion NZD previously while a surplus in 2017/2018 should be at 2.54 billion NZD while 2.87 billion NZD had been penciled in previously. Moreover, GDP growth in 2017-2018 is projected at 3.3% vs. 3.5% recently while 2018-2019 growth ought to show 3.4% against 3.5% seen previously. Net debt was also lifted from 18.8% of GDP in 2021 to 20.8%.

link do file download linkThe NZ dollar is falling back a bit, however it did an impressive gain yesterday hence a move toward 0.7060 cannot be ruled out. Once this level is broken, it could enable buyers to keep on rising nevertheless it doesn’t seem to be a base scenario. Source: xStation5