ASX 200: AUD falls, jobs data declines & tech stocks bounce this week
A jobs data miss, a mini tech stock bounce-back and a weaker AUD all cap-off an interesting week for the Australian market.
It was an okay week for the blue-chip benchmark, with the ASX 200 rising around 40 points – or 0.6% – during the last five trading sessions.
Financial stocks proved to be a mixed bag, while some of Australia’s key tech stocks bounced after a period of protracted weakness.
Jobs data came in well below expectations this week and the Australian dollar fell in response.
With all this in mind, we take a look at how all these factors fit into the broader picture of the Australian market below.
Australian dollar falls: jobs data comes in weak
What a miss.
The Australian Bureau of Statistics (ABS) yesterday revealed that overall employment decreased by 19,000 in October. Previous expectations were for an increase (yes, an increase) of 16,000 jobs during the month.
The Australian dollar (AUD/USD) fell by 0.5% in response to this miss. In saying that, the AUD rebounded slightly today, trading 0.18% higher by 12:09 AEST.
Adding to this, the ABS said ‘Australia's trend unemployment rate remained steady at 5.3 per cent in October 2019.’
Commenting on the consequences of this ABS data, IG’s Market Analyst, Kyle Rodda said:
‘The clear signs of increasing slack in the labour market has stoked expectations the RBA will be forced to cut interest rates sooner than previously thought.'
As a result of this and speaking to the current expectations around interest rates, Mr Rodda continued by saying that:
‘According to interest rate markets, the next rate cut is more than likely to come in February.’
Appen, Altium and WiseTech share prices all rise
Tech stocks have been hammered in recent months, with many market commentators suggesting a rotation from growth to value stocks may be upon us. Yet as Kyle Rodda also noted this morning, yesterday’s ASX 200 rally was underpinned by gains in ‘yield sensitive growth stocks and the defensive sectors.’
Ultimately, this has now capped off a bullish week for tech stocks. In the last five trading sessions the share prices of the following key tech stock have all risen: Altium (ASX: ALU) +3.76%, WiseTech (ASX: WTC) +5.37%, Appen (ASX: APX) +11.85% and Nearmap (ASX: NEA) +14%.
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