We are expecting the latest Australian labour market data, the last major data publication ahead of the next monetary policy meeting of the Reserve Bank of Australia (RBA). Economists at Commerzbank analyze how the employment report could affect the Aussie.

Rate expectations in Australia on a knife edge

“When it comes to the labour market data the economists polled by Bloomberg expect a slower, but still slightly positive increase in jobs. The slowing trend is likely to confirm the central bank’s view that the rate hikes are having an effect and that inflation and the economy are cooling. As a result, the RBA is likely to act more cautiously and take a wait and see approach in early June once again.”

“The main risk remains that the labour market data might surprise to the upside. A surprise of that nature would further fuel recent hopes of a further rate step and would no doubt be positive for the Aussie.”