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FXstreet.com (Barcelona) - Today's release of the labor force report had a much softer tone, with negative jobs growth for June (-27K) and the unemployment rate ticking up from 5.1% to 5.2%. This illustrates that the pace of growth has softened through Q2 from a surprisingly robust pace in Q1. From this perspective it reinforces the directional bias for RBA policy - namely easing.

"Set against other data and developments however, I expect it still falls a good way short of saying the RBA needs to cut rates again immediately." writes Peter Jolly, Head of Research at NAB. We are still four weeks away from the Aug 7 RBA meeting, but points to make are that the unemployment rate at 5.2% remains low by historical standards thus so no reason to give into panic yet. Moreover, the RBA has only recently cut rates a significant 75bps and the minutes told us the final 25bps in June was a close call.

Other data has been more mixed, even positive - this week the NAB business survey was solid and consumer confidence surprisingly up a little in July. 
"The only really valid reason to cut again in the near-term would be to stem the rise in the AUD, which is unhelpfully happening against a backdrop of ebbing commodity prices." adds Jolly. But speaking today Deputy Governor Lowe didn't seem too perturbed, with headlines reporting him as saying he thought it "hard to make the case that the AUD is over-valued".

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