TD Securities strategists note that Australian employment data for March broadly matched the Reserve Bank of Australia’s (RBA) expectations, with steady unemployment and solid full-time job gains. They highlight that labour headwinds from Middle East developments could emerge, but stresses that Q1 CPI on 29 April will be crucial for deciding whether the RBA raises rates, guiding Australian Dollar expectations.

Jobs steady while CPI decision looms

"There was nothing in the data to shake the RBA's labour market outlook. Headline jobs increased 17.9k (RBA and consensus at +20k) in March with strong full-time the key driver, +52.5k, while some of the spike in part time jobs seen in Feb is reversed, -34.6k. The participation rate edged lower a touch from 66.9% to 66.8% which helped keep the unemployment rate steady at 4.3%."

"Even with the drop in part-time jobs, full-time and part-time hours worked increased in Mar, to be +2.5% y/y from 0.9% y/y in Dec'25. Headwinds from the Middle East are likely to impact the labour market over coming months, but it will be Q1 CPI on 29th April that will be a key factor in determining whether the RBA hikes next month."

"Andrew Hauser, the RBA Deputy Governor spoke at the Institute of International Finance Global Outlook Forum, in Washington, D.C."

"The key comments from him were: 1) Australia “went into the Iran shock already running quite hot, and that created some challenges”.2) He said a major communication challenge for the RBA was explaining why the central bank might need to raise interest rates while Australians are hit with higher petrol prices and beyond - “Supply shocks are a hard sell to the public. Inflation is going to be higher, activity is going to be low, we’re going to be poorer. There’s not much upside news in that story"."

"Further he said “That’s harder at a time when we’ve had high inflation already, and people are already a bit resentful about that.”"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)