ASX200 trims losses after the lowest AU jobless rate since the 70s

With all the bearish news in recent months, it's easy to lose sight of the positives that emerged post the pandemic. Australian labour force data released this morning showed the unemployment rate fell to 3.9%, its lowest level since the 1970s.

Jobs 1

 

With all the bearish news in recent months, it's easy to lose sight of the positives that emerged post the pandemic. Australian labour force data released this morning showed the unemployment rate fell to 3.9%, its lowest level since the 1970s.

Although the economy added only 4k jobs, less than the 30k expected, a slight fall in the participation rate from 66.4% to 66.3% helped the unemployment slip below the magical 4% level.

The underemployment rate, which measures those with jobs but wish to work more hours, fell to 6.1% after being as high as 13.1% just 24 months ago, shortly after the onset of the pandemic. 

The news comes at a good time for the Coalition as it continues to close ground in the run into this weekend's Federal Election. After starting the week as outsiders and priced at over $4.00, betting markets show that the race has narrowed considerably, with the LNP now paying $2.65.

Recession fears may be helping the LNP's chances, but regardless the market has not been overly concerned about an ALP victory. The main risk remains a hung parliament locally, and fears of an imminent recession in the U.S as the Federal Reserve and other central banks focus on taming inflation. As Powell said earlier this week, "restoring price stability is a nonnegotiable need".

Nonetheless, the ASX200 has found some relief following the jobs data release. After falling 2% on the open following a weak lead from Wall Street, the ASX200 is currently trading 1.42% lower at 7080.

Over the past fortnight, the ASX200 has followed the road map almost to the T. After hitting our 7000/6950ish downside target last week, we called for a recovery towards 7200, a level it tagged yesterday.

Technically, a final leg lower towards range lows 6950/6750 is needed. However, whether that plays out will depend on this weekend's Federal Election outcome.

ASX200 Daily Chart 19th of May

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

 

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account