Australia Jobs Slump Hits Dollar, US Retail Seen Cooling

Australia jobs slump is impacting the dollar; US retail sales are forecasted to cool. Here are market insights and central bank notes.

The Australian labour force report for January has revealed a concerning trend. Only a marginal addition of 0.5K jobs to the economy, falling short of the estimated 26.4K increase, has been reported. This follows a significant decline of nearly 63K jobs in December. The unemployment rate has also increased to 4.1%, marking a departure from its steady position below 3.8% over the past two years.

The Australian Dollar (AUD) reacted swiftly to the news, initially trending toward 0.6500. However, it quickly reversed course upon the report’s release, dropping as low as 0.6478. Due to these disappointing figures, analysts anticipate continued pressure on the AUD throughout the day.

US Retail Sales and Unemployment Claims: What to Expect

In the United States, analysts anticipate that retail sales for January will show a second consecutive month of decline, with an estimated 0.2% drop following the holiday shopping surge in November and December. This trend suggests consumers may be scaling back spending after the festive season.

Meanwhile, unemployment claims have risen over the past three weeks, with the current estimate at 219K. A higher-than-expected figure could signal softness in the US labour market, potentially exerting downward pressure on the dollar.

Australia Jobs Slump Hits Dollar, US Retail Seen Cooling

Key Central Bank Notes and Market Biases

In Australia, the Reserve Bank of Australia (RBA) maintained its cash rate target at 4.35%, reflecting a cautious approach amidst economic uncertainties.

Similarly, the Bank of Japan (BoJ) remains committed to its Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control (YCC) strategy to achieve price stability.

The European Central Bank (ECB) opted to keep its key interest rates unchanged, with President Christine Lagarde’s forthcoming testimony expected to influence the Euro’s direction.

Market biases suggest a weak bullish sentiment for gold, a weak bearish stance for the Australian Dollar (AUD), and a weak bearish outlook for the Japanese Yen (JPY). Expect analysts to anticipate the Euro (EUR) and Pound (GBP) to show weak bullish and bearish tendencies, respectively. In contrast, they anticipate the Canadian Dollar (CAD) to display weak bullish sentiments.

Oil Market Dynamics

Oil markets faced downward pressure as API and EIA inventories reported significant builds, signalling a potential weakening of US crude demand. WTI oil prices retreated from recent highs, trading around $76.30 per barrel as Asian markets opened.

With overhead pressures persisting, oil market biases remain medium bearish in the next 24 hours.

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