Just this week Reserve Bank of Australia Governor Philip Lowe emphasised that rising underemployment and weak hours worked meant there was a lot more slack in the labour market than the unemployment rate on its own might suggest.
Consumer price data for the third quarter due next week will be crucial. A very low reading for underlying could make a case for an easing as early as the RBA's November 1 board meeting, but it is not our baseline scenario. Surprisingly low readings for prompted the RBA to cut rates in August and May, taking them to a record low of 1.5%.
Interbank still imply a 16% probability of an easing in November, though the AUD did take a knock on the jobs report.
The AUD/USD rise was stopped near September high (0.7732), but the long-term outlook remains . The nearest is 7-day at 0.7644.
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