ASX soars on shock jobs figures
The benchmark ASX 200 jumped 77.20 points or 0.90 per cent to 8,639.
The broader All Ordinaries also had a strong day up 74.40 points or 0.84 per cent to close Thursday's trading at 8,890.80.
The Aussie dollar slumped 0.87 per cent and is now buying 64.64 US cents at the time of writing.
Australia's markets immediately responded to the ABS announcement of a jump in the unemployment rate, with bond traders pricing in a 98 per cent chance of a rate cut. ASX soars after weaker than expected job figures. Picture NewsWire/ Gaye Gerard. Credit: News Corp Australia
The unemployment rate rose to 4.3 per cent last month against expectations of holding flat at 4.1 per cent.
With expectations of lower rates, the Australian dollar slumped back below 65 US cents, while Australia's sharemarket jumped on the news.
AMP economist My Bui told NewsWire the fall in the Australian dollar followed the market pricing in a more definite rate cut by the RBA.
It was a sea of green on the markets, with all 11 sectors finishing higher, led by industrials, financials and technology stocks.
'We continue to see the jobs market as being weaker than the (figures suggests),' Ms Bui said.
'Yes the unemployment rate seems quite low but this month we've seen weakening in multiple measures, including leading indicators in the job market which I think the RBA will pay attention to.'
Betashares chief economist David Bassanese said the weaker than expected job figures were a 'slum dunk' for rate cuts in June.
'We'll need more consistent signs of weakness in both employment and hiring indicators before we can conclude the labour market is turning,' he said.
'That said, today's result clearly adds to the case for a RBA rate cut at the August policy meeting provided next week's Q2 CPI report is not a shocker.'
Market heavyweight CBA jumped 1.82 per cent to $180.80, while NAB gained 1.12 per cent to $38.70, Westpac finished 1.20 per cent higher at $33.70 and ANZ climbed 1.10 per cent to $30.45. Despite the ASX overall soaring, it was mixed news for the miners. NewsWire / Jeremy Piper Credit: News Corp Australia
Tech stocks also rose with Xero jumping 1.71 per cent to $179.13, Life360 finished 1.10 per cent higher to $35.80 and Codan jumped 3.13 per cent to $19.75.
Iron ore miners had a mixed day despite the price of the commodity rising to a two-month high, surpassing $US100 a tonne during the day's trading.
BHP closed flat at $39.11, Fortescue gained 0.30 per cent to $16.91 and Rio Tinto gained 0.52 per cent to $7.48.
In company news shares in Clarity Pharmaceuticals rose 2.05 per cent to $3.48 after announcing an important milestone in the Co-PSMA trials.
Shares in superannuation and fund management business Australian Ethical soared 7.40 per cent to $6.68 after releasing its fourth quarter and full yearly update.
The ethically based fund said there was a 34 per cent increase in funds under management to $13.94bn.
The fight for ASX listed wagering business Pointsbet continued with Mixi formally lodging a second takeover bid and Betr announcing an unsolicited all-scrip takeover on Wednesday after the market closed.
Shares in Pointsbet closed flat.
Qantas shares also finished in the green up 0.55 per cent to $11.04 after it secured a Supreme Court injunction to stop stolen data being published by anyone, a few weeks after cybercriminals gained access to the airlines systems and stole 5.7 million customers personal details.
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The Age
8 minutes ago
- The Age
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Sydney Morning Herald
8 minutes ago
- Sydney Morning Herald
Melbourne suburbs where house values rose most over 20 years
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Sydney Morning Herald
8 minutes ago
- Sydney Morning Herald
Why do we keep expecting rate cuts, even when the RBA tells us not to?
When the Reserve Bank of Australia said it would cut interest rates in February, you could almost hear the entire country sigh in relief. At the time, mortgage holders had endured 13 interest rate hikes since May 2022, and the cash rate had sat at 4.35 per cent since November 2023. Even though the February rate cut was 'just' 0.25 per cent, it was welcome. To many – economists and financial experts, in particular – it was also a sign of things to come. When another rate cut followed in May, it all but confirmed the belief that a steady trimming of rates lay ahead, and indeed, going into last week's RBA meeting, the financial market was giving a 96 per cent chance of another cut. As we all know, that didn't happen, and many people – especially those who were predicting a cut – were very unhappy. While the disappointment was understandable, I found the shock that poured out after the announcement frankly baffling. At the February press conference by Governor Michele Bullock after the first interest rate cut in almost two years was announced, someone asked if Australian households could expect consecutive cuts throughout the rest of the year. If you rewind and look at what she said, it's clear the governor warned us all – pretty strongly – that we shouldn't get our hopes up. She called the prospect of consecutive cuts 'unrealistic', and added that 'the market is expecting quite a few more interest rate cuts by the middle of next year; about three more on top of this. Whether or not that eventuates is going to depend very much on the data – our feeling at the moment is that that is far too confident'. When suddenly our rate cut daydream was no longer on the table, people understandably were pretty unhappy. As if that were not clear enough, Bullock added: 'I want to be clear that today's decision does not imply that further rate cuts along the lines suggested by the market are coming'. She also said: 'We have to be careful not to get ahead of ourselves'. There are some very valid reasons for why experts were caught off guard by last week's decision (namely, the jobs figures, which many now see as proof the decision by the RBA and Bullock was wrong).
