The Antipodean countries, Australia and New Zealand, announced employment figures this morning in what could be best described as a mixed bag. These particular economies are of interest for traders as they are the de facto play upon China in the currency markets.
Both of these countries send a majority of their exports to the mainland, and as the markets are focused on China and its economic health most of the time; this makes sense that these employment numbers could be a reflection upon how much China needs in terms of raw materials in order to produce for the West.
According to the Household Labour Force Survey, the Kiwis came out with their employment changed at -0.1% for the quarter, which of course was much less than the 0.3% expected. This caused a selloff in the New Zealand dollar at first, but by the time the Japanese came online, we did see the Kiwi dollar stabilize. The negative employment change and the unemployment rate in New Zealand set at 6.8%, which is much higher than the 6.5% projected.
Across the Tasman Sea, we saw a gain of 14,000 jobs in July for the Australians. According to the Australian Bureau of Statistics, July saw the unemployment rate actually fall in Australia from 5.3% projected, to print 5.2% instead.
This may give a little bit of a boost to the markets overall, as the Australians are certainly the bigger of the two economies when it comes to supplying China. The "risk on" trade could come back into vogue if the markets interpret this as being positive for Chinese manufacturing. Adding further speculation to that cause, the Chinese CPI came out shortly thereafter at 1.8%, which is better than the 1.7% expected.
With this being said, the New Zealand dollar will more than likely underperform the Australian dollar, but both are being influenced by the expectations of the market for Federal Reserve easing. Because of this, the commodity markets may get a bit of a boost, and by extension both of these currencies. With all this being said, it does look like at least the hard commodities are being bought by the Chinese, as the Australian supply minerals, and the Kiwis supply soft commodities such as agricultural goods.