September month employment statistics from the Australian Bureau of Statistics creates an important update for traders as it portrays the employment damages Victoria’s lockdown did amid the corona virus (COVID-19) resurgence. Total employment fell -29.5k in September, Full-time employment fell –20.1k while part-time fell –9.4k with both representing a –0.2% decline in the month.

In the monthly unemployment rate increased to 6.9% from 6.8% (6.94% from 6.85% at two decimal places) due to a fall in participation from 64.9% to 64.8% (64.87% to 64.76% at two decimal places). The decline in participation drove a –18.3k contraction in the labour force. 

The September report also provided further insights into the impact of the Stage 4 restrictions in Victoria. Employment fell –35.5k in Victoria following a –37.2k in August while hours worked fell a further –2.1% following a –4.6% decline in August. However, the weakness this time was expressed in falling participation, down 1ppt to 63.0% which resulted in a 43.3k decline in the labour force and a –0.5ppt decline in the unemployment rate to 6.7%. Yes, a –35.5k decline in employment in Victoria was associated with a meaning full in unemployment. It appears a large number have given up hope, at least until the Stage 4 restrictions are lifted, of finding a job in Victoria.

Elsewhere, China’s September month Consumer Price Index (CPI) and Producer Price Index (PPI) impacts Aussie negatively. China’s price pressures for both producers in the PPI (prior: -2.0%, market f/c: -1.8%) and consumers in the CPI (prior: 2.4%, market f/c: 1.9%) have been released.

As per Chinese CPI, China September CPI +1.7 pct. from a year ago., China September CPI +0.2 pct. from the previous month. And China says September food CPI +7.9 pct. from a year ago; non-food CPI 0.0 pct.

And As per Chinese PPI, China September PPI -2.1 pct from a year ago, and China September PPI+0.1 pct from the previous month.

AUD/USD 4 Hour Chart:

Support: 0.7145 (S1), 0.7129 (S2), 0.7107 (S3).

Resistance: 0.7184 (R1), 0.7206 (R2), 0.7222 (R3).

Amidst all the catalysts creating a negative impact on Aussie, we expect a bearish trend for AUD/USD.