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Employment data the main focus

Published July 18, 2019

Author: Rhys Miles

A subdued overnight session in offshore markets as a slightly disappointing start to the US reporting season takes a bit of heat out of the equities markets. Our local equities are expected to follow offshore markets down today but the main focus will be our employment data at 11.30am. Given the focus on employment in both of the RBA’s minutes following consecutive rate cuts, today’s data takes on greater than normal relevance. A third rate cut locally is still considered a low probability in the third quarter as the market takes a wait and see approach to how the latest cuts, both interest rates and tax, flow through to the economy.

The AUD continues to find support around 0.7000 against the USD and against the EUR and GBP it is advantaged by those currencies suffering small declines due to internal domestic issues. Of course the two main drivers of market activity over recent months being the dark shadow of the US/China trade wars and US interest rates are going nowhere so volatility will remain an ever present consideration.