Early this morning we had jobs figures released for Australia, which showed a healthy performance with over 40,000 jobs added last month. This represented the strongest increase in five months, coupled with the unemployment rate dropping from 4.5% to 4.4%.
This data has done little in the way to alter interest rate expectations however, with Capital Economics suggesting inflation figures will still be the key driver for The Reserve Bank of Australia, and with that markets are still siding with the view of one final rate hike in the coming months.
Turning our attention to this afternoon's releases, it is heavily weighted towards The U.S and we have a number of releases across Jobs figures, Inflation for May, as well as Personal Income & Spending and GDP figures. The all-important inflation figures for May look set to climb again, with prices excluding food and energy set to climb to 3.4% and 4.1% when including those figures. If the release falls in line with expectations, we would expect to see further US Dollar strength, as it continues to hold its own near a 13-month high as it would only further cement the need for future interest rate hikes by the Federal Reserve.
Personal spending looks likely to increase marginally, by 0.1% which shouldn't necessarily come as a surprise with consumers potentially remaining cautious as we still await a complete agreement in The Middle East, but crucially are starting to see the knock-on effects in inflation and energy prices.
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