### POV: RBA LIKELY TO LOOK THROUGH LATEST......>

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.