In its preview of the Australian labour market report, analysts at TD Securities (TDS) highlights the impact of this report on the Australian dollar.
Key Quotes:
“A weak employment report poses some risks to what looks like a nice, short-term value trade in AUDUSD.
We believe that AUDUSD is trading at a roughly 4-sigma discount, reflecting the fallout of the US-China trade wars, the China growth slowdown, alongside various local risks.
Our employment forecasts is a near 3-standard deviation miss against consensus. Historically, a move of that magnitude has weakened AUDUSD around 0.6% in the first five minutes of trading over the past two years.
That said, like most of the G10 employment reports, it is noisy with the usual gap of +45k between the max and the min expectation. We also note that the historical data shows that the impact to this report leans towards AUD upside rather than the downside.”
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