After being the household spending being hit, Australian wages grew at their slowest pace on record in the second quarter.

The official wage price index (WPI) rose 0.2% in the three months to the end of June. That was below the already subdued 0.3% forecast and the 0.5% growth seen in the previous quarter.

The Private sector rose 1.7% over the twelve months to the June quarter 2020. The Public sector rose 2.1% over the twelve months to the June quarter 2020. Both the Private and Public sector annual growth is the lowest record since 1997.

Annual wage growth slowed to 1.8%, well below the levels that used to be considered standard for the country. Both annual and quarterly wage growth were the weakest since records began in September 1997.

Andrew Tomadini, head of price statistics at the ABS said that “The data marked the first full period that captured the impact of COVID-19-driven social and business restrictions”.  “The fall in private sector wages is mainly due to a number of large wage reductions across senior executive and higher paid jobs,” Tomadini noted.

“Looking ahead, wages growth is likely to remain very weak given the collapse in employment and the depressed economic environment,” said Sarah Hunter, chief economist, at BIS Oxford Economics.

In the meantime, US yields are rising in the USD-positive manner. Notably, the 10-year yield jumped by most in over two months on Tuesday as investors sold bonds in anticipation of a surge in debt issuance by the US government and American corporations. A record $38 billion bond auction is due on Wednesday.

In addition, gold, one of Australia’s top exports, fell by most in seven years on Tuesday, having recently rallied to a record high of $2,081.

AUD/USD 4 Hour Chart:

Support:  0.7117 (S1), 0.7099 (S2), 0.7063 (S3).

Resistance: 0.7172 (R1), 0.7208 (R2), 0.7227 (R3).

Recent data shows that consumer confidence and business conditions were hit badly in Australia and hence we expect a bearish trend for AUD/USD.