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Australian unemployment rate dipped to 4.9% in February via a +5k lift in employment (TD flat, mkt +15k), while full-time pulled back by -7k after a string of strong months, as part-time rose +12k, notes Annette Beacher, chief Asia-Pacific macro strategist at TD Securities.

Key Quotes

“The participation rate edged lower as we expected to 65.6%. The RBA expects the unemployment rate to be 5% this year, so today’s report is consistent with that view.”

“The RBA also focuses on underemployment, and there is good news there as well. Underemployment and underutilisation rates/ratios have been edging lower (not in a straight line) for the last two years. The slump in the underutilisation rate hints at 3%/y wages growth by year end.”

“The AUD has traded within a US0.70-73 range for the last six months, and today’s rally doesn’t threaten the range. OIS is priced for a 25bp rate cut by August. The next policy hurdle is Q1 CPI on 24 April, where our tracking looks for core to be 1.75%/y.”

“We do not look for rates cuts at this juncture.”