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Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities, notes that the Australian  unemployment rate remained at 5.4% in June, although this masks a solid report: employment expanded by +51k (TD +20k, mkt +16.5%) via an outsized rebound in full-time (+41k).

Key Quotes

“As the participation rate climbed back to 65.7%, the RBA can still claim that a half-percentage-point of spare capacity exists in the labour market.”

“We do not expect lasting strength due to: (1) the unemployment rate remaining above 5%; (2) Q2 CPI next week is likely to reveal business-as-usual 2%/y underlying inflation; and (3) Q2 WCI is released August 15, and growth is likely to be much closer to 2%/y than the RBA ‘target’ of 3%/y. The latter two are far more important policy hurdles, not today’s report.”