PRIMER: Aussie jobs data due overnight

Analysis details (20:19)

* PREVIEW - AUSSIE JOBS: Overnight, Aussie Q1 wage prices were short of expectations (2.3% Y/Y for third straight quarter vs RBA SOMP which pencilled in 2.4%), and while it is only slightly off the RBA's forecast, it challenges the RBA's view that wage growth is seen gradually improving. Governor Lowe recently said 3% Y/Y is needed to generate inflation at 2.5% Y/Y (mid-point of RBA range). April jobs data overnight is the next piece to the puzzle, and will receive more focus than usual given that the RBA "will be paying close attention to developments in the labour market at its upcoming meetings" and thus the next few releases will be critical in determining the timing of potential policy easing. The employment change is seen at +15k (prev. 25.7k, range 5k-25k, 3M average 23.7k), the unemployment rate is expected to tick up to 5.1% from 5.0% (range 4.9%-5.1%) and the participation rate is set to remain at 65.7% (range 65.5%- 65.7%). Westpac’s Jobs Index now suggest that employment growth should slow to around annualised rate of 2% in Q3, which points to an employment rise of +10k. Westpac notes that if the participation rate was unchanged, it would imply +17.8k rise in the labour force, lifting the unemployment rate. Some analysts are more sceptical that the RBA will cut rates in the near-term: ANZ said "it will probably take more than this for the RBA to move, given the likely one-off impact of the election which will add thousands of (temporary) jobs," and it says a number jobs reports will be needed to establish a trend; thus, an August cut seems more likely than June or July, the bank said.

15 May 2019 - 20:18- Research Sheet- Source: RANsquawk

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