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Australian job data review and ASX 200 afternoon report: 16th of March 2023

Taking a backseat to the rapidly unfolding events in the Europe banking sector, this morning's release of stronger-than-expected Australian jobs data for February and find out all the latest information on the ASX 200 market.

Source: Bloomberg

Today's release of stronger-than-expected Australian jobs data for February confirmed expectations for a rebound after two months of declines.

  • Employment increased by 65k in February, above consensus expectations of 50k
  • The unemployment rate fell to 3.5% from 3.7% in January, below consensus expectations of a fall to 3.6%
  • The participation rate increased from 66.6% to 66.5%
  • The underemployment rate fell from 6.2% to 5.8%.

Overall, the stronger-than-expected numbers have reversed the seasonal factors that played a role in the weaker number in the prior two months.

In isolation, a tight labour market and high inflation would typically merit higher rates from the RBA.

However, the events in the global banking sector over the past week mean that inflation is yesterday's problem. Higher funding costs, stricter regulation, lower margins, and capital raises in the banking sector will restrict the flow of credit to the economy.

Growth and inflation will inevitably slow, which explains why the Australian interest rate market is fully priced for an RBA rate cut by July. July, however, is a lifetime in markets like these. In the meantime, it's been another brutal day on the ASX 200, which trades 114 points (-1.62%) lower at 6955 at 3pm Sydney time.

Afternoon report

Financial sector

There has been further bloodshed in the banks.

  • ANZ fell 2% to $22.82
  • Macquarie fell 1.84% to $174.82
  • Westpac fell 1.85% to $21.25
  • NAB lost 1.3% to $27.94
  • CBA fell 0.47% to $94.96.

Energy sector

Crude oil fell below $68 p/b overnight on growth concerns which weighed on the Energy Sector.

Mining sector

The big mining stocks are under pressure on global slowdown concerns.

IT sector

Today's rout was completed by heavy falls in the tech sector despite the Nasdaq closing higher overnight.

ASX 200 technical analysis

We remain optimistic that the ASX 200 can reclaim the 200-day moving average at 7010 (like it did in early January), and we will stay with the view that the pullback from the Feb 7567 high is countertrend and that a rebound will follow.

However, should the ASX 200 fail to reclaim 7010 over the next 24 hours and then break below the 6905 low of early January, a retest of the bottom of its 12-month range at 6410 is possible.

ASX 200 daily chart

Source: TradingView

TradingView: the figures stated are as of March 16th, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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