Australian Jobs Report Better-than-Expected
Australia saw unexpected job growth today as reports were released suggesting employment had risen by 14,000 for the month of July, representing massive gains on 28,000 decrease seen in June. The Australian economy is notoriously dependant on miners and various other resources which have fallen drastically on a global scale, with Rio Tinto’s recent 22% drop in quarterly profits being a prime example. Western Australia, the country’s larged iron ore mining region, also saw a big rise in unemployment. The better-than-expected job growth report comes less than a week after the US announced 163,000 new jobs in July, which has rallied markets across the world. While this is not expected to have such a significant impact the news will be welcomed by all. Unemployment fell from 5.3% to 5.2%.
The Australian dollar made impressive gains on the back of the data, as the worlds 5th most traded currency rallied to $1.0602 – just shy of a 4.5 month high. The Reserve Bank of Australia recently cut borrowing rates drastically in an attempt to stablise the economy as the rest of Asia faltered, a move which now seems to be paying dividends with evidence of consumer confidence on the rise. The increased confidence was also spurred on by government rebates and an increased welfare injection.
Asian Stocks Continue to Rally
Asian stocks have continued their four day rally as Chinese production decreased and inflation slowed for a fourth consecutive month. Rio Tinto made gains of 3.8% on the back of their better-than-expected earnings report and internal claims that the company is in negotiations to sell their diamond assets. The MXAP was up by 0.39%, with small gains across the board after huge gains made by the majority of shares in the index over the last three days. Energy stocks have been the biggest losers throughout the last week.