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RBA
MNI (London)
RBA: ### POV: RBA LIKELY TO LOOK THROUGH LATEST DIP IN UNEMPLOYMENT
The RBA will likely look through the most recent AU labour mkt data, which was
headlined by a fall in the unemp. rate (5.0%; Median 5.3%; Aug 5.3%) driven by a
fall in the participation rate (65.4%; Median 65.7%; Aug 65.7%) as the headline
addition to the number of those employed missed exp.
- The reaction in mkt pricing of RBA hikes has been ltd, which is probably
justified. RBA Dep. Gov. Debelle spoke Weds, suggesting that unemployment may
fall further than it has done in prev. instances before wages pick up. This
points to a limited RBA reaction function in the case of a lower unemp. rate
absent an uptick in wages (especially when driven by a lower part. rate).
- It is worth noting that the unemp. rate has now reached a level that the RBA
was exp. it to hit in late '20, although this was also covered by Debelle, as he
noted that unemp. may decline at a faster rate than the Bank exp.
- All in all, absent an uptick in wage growth over the coming months, the latest
leg lower in the unemployment rate, if maintained, is unlikely to have a major
impact on the trajectory of RBA MonPol in isolation.
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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