Australia’s central bank will review new employment figures before announcing its key interest rate next month.
Ahead of the forecast, the Australian share market closed at its highest ever on Friday after a bigger-than-expected drop in US inflation fuelled speculation that the US Federal Reserve would cut interest rates.
In Australia, official labor market data are consistently strong, even as higher interest rates slow the economy and other labor market indicators such as job vacancies and the number of job advertisements lose momentum.
The Australian Bureau of Statistics’ June labour market data, scheduled to be released on Thursday, follows a decline in the unemployment rate in May.
The unemployment rate fell from 4.1 percent to four percent in April, broadly in line with expectations, and 39,700 new jobs were created in the economy.
Following stronger-than-expected monthly inflation, the possibility of another interest rate hike has resurfaced, although the more likely scenario remains that rates will remain high for the longer term.
While the broader inflation statistics for the second quarter of the year, due to be released later this month, will be the most important release for the Reserve Bank of Australia, the state of the labour market will also influence the interest rate decision in August.
The central bank is trying to fight inflation while preserving as many of the post-pandemic gains in the labor market as possible.
Nevertheless, the unemployment rate is expected to gradually increase and so far the labour market has behaved broadly as the RBA expected.
Other items on the agenda include the Statistics Office’s quarterly construction data on Wednesday and a panel appearance by RBA Head of Economic Research John Simon in Sydney on the same day.
Wall Street stock indices closed higher on Friday on speculation that the US Federal Reserve will cut interest rates in September, while major banks fell after reporting mixed results.
According to preliminary data, the S&P 500 gained 31.92 points, or 0.57 percent, to close at 5,616.46, while the Nasdaq Composite gained 113.58 points, or 0.62 percent, to 18,396.98. The Dow Jones Industrial Average rose 260.02 points, or 0.65 percent, to 40,013.77.
Australian futures rose 51 points or 0.64 percent to 7992.0.
The Australian share market closed at its highest ever after inflation in the US fell more than expected.
The leading index S&P/ASX200 closed on Friday with an increase of 69.7 points or 0.88 percent at 7,959.3, while the broader All Ordinaries rose by 72.7 points or 0.89 percent to 8,206.1.