A$ Ignores Jobs Data, Back To Equity Watching

AUD largely ignored the employment data and is back to watching equity sentiment. This is likely to reflect offsetting factors within the report, as jobs growth was weaker than expected, but full-time employment soared, more than offsetting the sharp drop in part-time employment.

• The unemployment rate edged down to 3.9%, in line with forecasts, but the participation rate fell to 66.3% versus 66.4%.
• The result is unlikely to shift the RBA debate a great deal. AU-US government bond spreads are lower compared to levels that prevailed yesterday. The 2yr spread is back close to -13bps, lows last seen in late April.
• The AUD/USD had a volatile start today, albeit within a fairly narrow range. The pair has traded a 0.6953-0.6977 range. Gyrations in AUD/JPY, which has had a 0.70% range for the day (around 89.00-89.65) has been a key driver of sentiment.
• Equity sentiment is being watched closely. All major markets are weaker, but losses haven't accelerated since the open. US futures are weaker, but are off worst levels for the day.