Asian markets rebound; Australian unemployment rises

<p>Asian stocks were higher today after yesterday’s losses, today rallying the most in three weeks. The regional MSCI Asia Pacific Index was 1.1% higher in […]</p>

Asian stocks were higher today after yesterday’s losses, today rallying the most in three weeks. The regional MSCI Asia Pacific Index was 1.1% higher in early afternoon Tokyo trading.

In economic news, Japan’s economy contracted less than the government’s initial estimate last quarter, improving prospects for the recovery from last year’s earthquake. GDP fell by 0.7%.

The US dollar gained ground against the Japanese Yen, last trading at 81.25. The Euro traded at 1.3170 against the dollar ahead of the Greek deadline. Gold traded at US$1688/oz while silver touched US$33.57/oz.

Elsewhere in the region, Australia’s unemployment rate bounced back to 5.2% as expected, but again the composition of the numbers was different to market expectations.

Around 15,200 jobs were lost during the month as opposed to the 5000 additions that the market was expected. The movement in the participation rate helped contain the unemployment rate, but the numbers following on from a disappointing GDP print yesterday.

Part time employment remains the key swing factor with full time employment steady. At least that provides some comfort.

It’s unclear if yesterday’s Australian GDP and today’s employment numbers are enough to bring forward a rate cut, or if they qualify for the “material decline” in demand that the RBA on Tuesday said would bring forward a cutting prospect.

The unemployment rate is still at a very strong level, by global and historical standards, but there’s no doubt another rate cut or two could provide some much needed stimulus in the eastern states as demand softens. All eyes will be focused on Chinese inflation which will be released tomorrow.

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