The market is awash with talk about somebody having access to the ABS's highly price-sensitive unemployment data before today's 11.30am release. In the minute before the ABS data were published, I was told that the 3 year government bond contract, which is listed on the SFE, surged four points on decent volume, which is highly unusual just prior to a major piece of event data. This follows some questions around similarly eye-catching trading before the release of other ABS data.
The data themselves were decidedly weak: jobs growth in Australia has averaged only 5k per month since the start of December compared to a 33k per month pace between January and November 2010. Last month’s (April) 22,100 lost jobs was revised down further to 29,400 lost jobs. This month (May) there were 22,000 lost full-time jobs, although overall jobs rose by 7,800 (because of part-time). Last month's (April) unemployment rate of 4.86% was up slightly in May to 4.93%.
So, all told, the RBA's decision to pause, and those arguing for Q3 hikes following Q2 CPI, are looking pretty wise at this point in time! I take my hat off to Scott Haslem at UBS and Tim Toohey at Goldman Sachs.
