Sean Callow, analyst at Westpac, suggests that Australia’s key data releases this week added to the case for RBA easing but left open the question of when the first cut would be delivered.
“The NAB employment index slumped from +6 in Mar to -1 in Apr. Overall wages rose a muted 0.5%qtr but as the chart across shows, private sector wages growth is still trending higher.”
“And the April labour force had something for everyone – yet another month of jobs growth beating expectations but a rise in participation to confirm greater slack in the labour market and therefore a greater challenge to get inflation back to target.”
“Ahead of the RBA minutes and Lowe speech on Tue, AUD needs to digest the election result. Polls point to an 80% chance of the Coalition government losing power to Labor after 6 years but perhaps relying on cross-bench support in the Senate, adding to uncertainty.”
“News flow on US-China trade relations can swing in either direction quickly but Trump’s focus on the 28/29 June G20 suggests no resolution near term. A$ to spend more time with the 0.68 handle.”