AUD Slips as RBA Hike Bets Fade Post-Jobs Miss

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AUD Slips as RBA Hike Bets Fade Post-Jobs Miss

-13 NAB Business Confidence-39,300 Employment Change34,400 Full-Time Employment4.70 Headline Unemployment Rate56.50 Business NZ PMI

ASX 2008,806.70+1.00%

NZX 5013,753.73-0.57%

AUD/USD0.70+0.79%

NZD/USD0.57+0.59%

Market Snapshot

Asset	Level	Change
ASX 200	8,806.70	+1.00%
NZX 50	13,753.73	-0.57%
AUD/USD	0.70	+0.79%
NZD/USD	0.57	+0.59%
AUD/NZD	1.23	-0.09%
BHP	60.03	+3.50%
Gold	4,181.10	+0.26%
Brent Crude	109.86	+3.72%
Bitcoin	80,865.42	-0.63%
Australia 2Y Govt Yield	-	-
Australia 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
NAB Business Confidence Index	-8	-	-13
RBA Meeting Minutes	-	-	-
Employment Change	29,300	20,000	-39,300
Full-Time Employment Change	-4,000	-	34,400
Headline Unemployment Rate	4.70	4.60	4.70
Business NZ PMI	53.30	-	56.50
RBA Kent Speech	-	-	-

Today's Economic Events

Data	Prior	Cons	Time
Trade Balance	-1,349m	-775m	17:45
RBA Kent Speech	-	-	19:05

Australia shed 39,300 jobs in September, far below the 20,000 consensus, keeping unemployment at 4.7% and prompting markets to abandon November RBA hike expectations.
New Zealand's Business PMI surged to 56.5 from 53.3, though ANZ research suggests disinflation remains incomplete.
AUD pared weekly gains as the US dollar steadied on reduced Fed hike odds; NZD faces a critical CPI test after five straight quarterly declines.

Yesterday's Recap

Friday's session delivered a pivotal Australian labour print that reshaped the rate outlook. Employment Change contracted by 39,300 against expectations of a 20,000 gain, though composition was more encouraging with Full-Time Employment adding 34,400 after a 4,000 decline previously. The unemployment rate held at 4.7%, above the 4.6% consensus, reinforcing the cooling-labour narrative.

The AUD initially crumbled on the release as traders slashed November RBA hike bets, but later pared losses, closing at 0.70, up 0.79%, as the US dollar weakened on diminished Fed tightening expectations. Equities diverged: the ASX 200 rallied 1.00% to 8,806.70, led by BHP's 3.50% surge to 60.03, while the NZX 50 slipped 0.57% to 13,753.73. Brent crude jumped 3.72% to 109.86 and gold edged higher to 4,181.10, supporting resource-heavy names.

Earlier in the week, New Zealand's Business PMI printed 56.5 on October 15, up sharply from 53.3, signalling robust manufacturing expansion, while NAB Business Confidence deteriorated to -13 from -8.

The Day Ahead

Today's calendar is thin but not empty. New Zealand's Trade Balance is due at 17:45 ET, with the previous reading a NZD 1.349 billion deficit and consensus looking for a narrower NZD 775 million shortfall; a smaller deficit would offer modest NZD support. RBA Assistant Governor Kent speaks at 19:05 ET, a high-impact event where markets will scrutinise every word for hints on the rate path following the labour disappointment.

With the cash rate at 4.60% after four hikes, Kent's commentary on employment softness will be critical for pricing the next move. Tomorrow's calendar is currently empty, leaving the week's data heavy lifting largely complete. Traders should also monitor the upcoming New Zealand CPI release, viewed as make-or-break for the kiwi's five-quarter losing streak.

Other Economic Notes

Australia's labour market is at an inflection point, with headline job losses masking a solid full-time gain that suggests hours-based softness rather than wholesale deterioration. ↓ p.2

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Australia Unemployment Rate Holds at 4.7%

Other Economic Notes (continued)

The NAB confidence slump to -13 reflects mounting pressure from cumulative tightening, with four RBA rises since mid-year now visibly weighing on sentiment. New Zealand's PMI surge to 56.5 contrasts with persistent inflation concerns, as ANZ research indicates price pressures are cooling but remain above target-consistent levels. The commodity complex is providing a tailwind, with iron ore and energy strength underpinning BHP's rally and Australia's terms of trade.

India's notification of first tariff cuts under its FTA with New Zealand opens a modest new trade channel for the dairy-led economy.

Global Macro News

The US dollar's trajectory remains the dominant external driver, with reduced Fed hike expectations this month easing pressure on regional currencies. The Korean won's drop to a two-year low, followed by a rebound on robust exports, illustrates the volatility sweeping Asian FX. China's growth outlook continues to anchor Australian commodity demand, and Brent crude at 109.86 carries mixed implications, boosting LNG revenues while raising input costs.

Gold's resilience above 4,180 reflects safe-haven demand. Bitcoin's 0.63% decline to 80,865 signals caution in speculative assets. AUD/USD at 0.70 and AUD/NZD at 1.23 reflect relative stability within the bloc, though both remain hostage to US rate expectations and Chinese stimulus headlines.

Continuation

ANZ Central Banks Watch

The RBA's October 8 decision to hold at 4.60% followed four consecutive rises, and the subsequent minutes alongside Kent's speeches will frame the debate over whether the tightening cycle has peaked. The 39,300 job losses have materially weakened the case for a November move, with markets now pricing an extended pause, though the 4.7% unemployment rate and solid full-time hiring complicate the dovish reading. Across the Tasman, the RBNZ's OCR stands at 2.75% following the October 9 review, a markedly less restrictive setting reflecting New Zealand's earlier and deeper easing cycle.

This 185 bp policy gap underpins AUD/NZD strength. The upcoming New Zealand CPI, last at 4.1% annually, will be decisive for the RBNZ's next move, with ANZ's own research flagging that disinflation is real but insufficient to declare victory. The RBNZ's path lower contrasts with the RBA's hold-and-see stance, a divergence that favours AUD crosses.

Housing sensitivity remains elevated in both economies, with Australian mortgage holders bearing the brunt of rapid hikes while New Zealand's easing offers relief. Watch for any Kent commentary on the labour-market transmission channel.

ANZ Macro Daily(Beta Mode)