The health of global labour markets has been a focal discussion point with central banks in recent weeks for upcoming decisions surrounding the timing of rate changes, causing a rippling effect of the currency markets fluctuating wildly on employment data indicators.
Overnight the UK employment data was released with mixed results. The unemployment rate itself has improved again down for the month to 5.3%, the lowest unemployment rate since the spring quarter of 2008 according to the National office for Statistics.
Whilst this does show the labour market of the UK improving, underlying this result was the release of claimant count and average earning Index, both of which fell short of expectation.
Claimant Count Change, which is the number of people claiming unemployment benefits rose to 3.3K from 0.5K.
The report showed some slowing in the pace of wage growth with average earning index remaining stagnant at 3.0% however this was lower than the expected improvement of 3.2%.
Bank of England (BoE) policy makers were positive on the news that this was one step closer to their employment goals also trying to take a positive from the stubbornly low inflation levels by making comment that this has provided real income growth for employees in the UK.
Australian Employment data is set to be released today. Whilst analysts are watching the UK and US labour market for improvement to seek indication on the timing of the next rate rise for these economies, Australian data is currently being dissected for future stance on the possibility of rate cuts here by the Reserve Bank of Australia (RBA).
Analysts expect the unemployment level to remain steady for October at 6.2% with the expected participation level constant at 64.9% and growth of jobs at 15,000 predicted. As with other global economies the health of the labour market is a key indicator for the central bank’s decision and stance on future monetary policy and the RBA have made it clear that if the employment level is to decline they will need to look at further stimulus. There is risk of job growth slow down given the downturn in the mining sector which will need to be picked up by other industries for Australia’s employment level to remain constant.
Employment will continue to be the focus for the week tonight with US unemployment claims out for the week. Last week the result rose to 276k from 260k the week prior. The expectation for this week is for an improvement to the number of individuals claiming down to 270k.
The market will then turn to Washington as Federal Chairwomen Janet Yellen is due to speak at the Conference on Monetary Policy Implementation, analysts will be closely listening to Chairwomen Yellen for any clues on whether the Fed still looking at the possibility of a December Rate hike.
The Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate is currently trading at 0.4640
The Australian Dollar to US Dollar (AUD/USD) Exchange Rate is currently trading at 0.7061