Post #15712

The Aussie Train Has Left the Station AUD/USD is ripping to its strongest level since October, notching a fourth straight daily gain and continuing to outperform even through bouts of broader risk pressure. Australia’s labor market came in hot. Employment jumped by 65k in December, smashing expectations, while the unemployment rate fell to a seven-month low at 4.1%. That combination has forced a sharp repricing in RBA expectations, with markets now assigning better-than-50% odds of a rate hike at the February 3 meeting, up from sub-30% before the release. A hike is now fully priced by May. Easing U.S.–Europe tensions helped stabilize risk sentiment, but the real driver here is domestic strength. Solid jobs growth and rising household spending point to an economy running hotter than anticipated. Next up is Q4 inflation. A firm core print would only reinforce the case for an earlier RBA move. The broader takeaway: rate speculation is back in focus, and AUD (and NZD) are being rewarded for it. - Alan