Commerzbank’s Volkmar Baur notes Australia’s labour market stays strong, with unemployment at 4.1% and stable job creation, supporting the Reserve Financial institution of Australia’s latest hike. Nevertheless, wage progress is subdued and actual wages flat, main Commerzbank to count on just one additional price enhance, viewing present market pricing as too optimistic and AUD upside capped.
Sturdy jobs however muted pay pressures
“The Australian labor market continues to be in very strong form, as information launched on Thursday reveals. Unemployment remained at 4.1%, which could be very low by historic requirements, whereas job creation was additionally stable, with 17,800 new jobs added.”
“Nevertheless, we stay cautious. Knowledge from Wednesday additionally reveals that low unemployment doesn’t appear to be translating into robust wage progress.”
“Since trimmed imply inflation up to now quarter was additionally 3.4% year-on-year, actual wage progress in This fall 2025 was truly zero. This isn’t precisely a determine that may trigger concern about inflationary results.”
“Nonetheless, we’d assume that the central financial institution will solely elevate rates of interest another time. The present market expectations subsequently appear considerably too optimistic to us, which is able to restrict the AUD’s additional upside potential within the coming months.”
(This text was created with the assistance of an Synthetic Intelligence software and reviewed by an editor.)
