Weak jobs data boosts chance of rate cut
The chance of an interest rate cut in August have improved after official figures showed Australia's unemployment rate rose in June.
Data released by the Australian Bureau of Statistics on Thursday show total employment fell by 27,000 in June while the unemployment rate rose to 5.2 per cent, from 5.1 per cent in May.
Economists had expected employment to remain flat in the month.
JP Morgan Australia chief economist Stephen Walters said the figures meant it was more likely the Reserve Bank of Australia (RBA) would cut the cash rate again.
"This number makes it more likely the Reserve Bank is going to cut again and it could be as early as August," he told AAP.
The RBA cut the cash to a quarter of a per cent to 3.5 per cent in June.
However, Mr Walters said the monthly jobs data was notoriously volatile and the fall in employment came after several months of solid growth.
RBC fixed income strategist Michael Turner said that despite the weaker headline figure, the market was only slightly more confident that the RBA could drop the cash rate in August.
"There's an increase of about four or five basis points towards the expectation that they'll cut next month, which isn't a huge move," he said.
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