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A quiet night

Published May 17, 2019

Author: Rhys Miles

US equities continue to reclaim the losses of last week rising for the third day in a row. Positive earnings reports supported by good housing data and US employment data appear to be the catalyst pushing into the background the ongoing concerns over trade tariffs.

Despite this general positivity and a gradual improvement in commodity prices the AUD is still under significant pressure for the reasons mentioned yesterday. Our employment data yesterday, whilst not terrible, was not what the market was looking for. Jobs growth exceeded expectations but the all important unemployment rate climbed. The increase in jobs was attributed to mostly part time jobs which fed into the underemployment rate which rose from 8.2 to 8.5%.

The conclusion to be drawn is that the eagerly awaited lift in wages growth is unlikely any time soon which reinforces the case for rate cuts.

The Australian election is almost upon us but elections typically don’t influence the financial markets too much. Given the vast difference in policy platforms between the two main candidates and the strong possibility of a hung parliament it will be interesting to see how the markets react early next week.

No market moving data today or tonight offshore.