By: Michael Boutros, Sr. Technical Strategist
U.S. employment data now carries more weight for the Australian dollar than any release out of Australia itself. The pair has just reversed off a multi-year resistance zone after an eight-week advance, and the question of whether that pullback deepens or stabilizes runs through the U.S. labor market rather than the domestic growth picture. Three separate catalysts land inside a single week, starting with Australian second quarter growth figures and moving quickly to U.S. private sector hiring and then to nonfarm payrolls. Each one feeds the same transmission channel, namely what traders expect the Federal Reserve to do next.
Michael Boutros is a StoneX Media Senior Market Analyst with more than two decades trading foreign exchange, commodities and equity indices, and he applies a structured multiple time frame approach with a medium-term, event-driven focus. That event-driven lens covers the currency pairs, macro data calendars and rate expectation shifts that connect U.S. employment releases to currencies such as the Australian dollar.
The Australian dollar faces three scheduled catalysts in a single week, and only the first is domestic. Australian second quarter growth data opens the run, as Boutros notes when he says "some event risk on tap starts tonight out of Australia with that update on the Q2 GDP figures", before attention shifts across the Pacific. The ADP private sector employment report follows, with private sector hiring expected to print at 47,000, and nonfarm payrolls closes the week. Specifically, that sequence means the Australian dollar spends most of the week reacting to U.S. data rather than to conditions in Australia. For a trader watching the pair, the practical consequence is that position risk concentrates in the back half of the week, not the front.
Federal Reserve rate expectations for September inverted in the space of a week, moving from roughly a 60% probability of a hold to markets pricing close to a 67% chance of tightening. The trigger was the commentary delivered at the Jackson Hole Economic Symposium, with the focus squarely on the inflationary outlook. That repricing is what hands the U.S. labor market its influence over the Australian dollar. According to Boutros, "if the employment market starts to show signs of weakness, if the labor market starts to deteriorate, a weaker than expected print could shift those interest rate expectations". Conversely, data that comes in close to expectations leaves the tightening bias in place and the pressure on the pair intact.
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Michael Boutros, StoneX Media Senior Market Analyst
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only.
StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs.
This content does not constitute an offer, invitation, or solicitation to engage in any investment activity.
The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice.
Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results.
Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced.
This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research.
StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity.
StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate.
This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations.
Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
Eurozone inflation is at its highest level in almost two years, and the euro is falling anyway. The reason sits in Germany's retail data, where the sharpest sales decline in four years has turned a hawkish rate story into a growth problem.
U.S. employment data has taken over as the main driver of the Australian dollar, with each release feeding straight into Federal Reserve rate expectations. Michael Boutros walks through the payrolls week sequence and what a weaker labor market reading would change.
Private house approvals and commencements are weakening, raising questions over Australia’s housing pipeline ahead of Q2 GDP.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
