The Australian Bureau of Statistics’ monthly jobs report for August 2025 is released today, ahead of its usual schedule. This first stage, known as Labour Force, Australia, includes key figures on employment, unemployment, underemployment, participation, and hours worked. A more detailed breakdown will follow about a week later.
Today’s report is expected to reveal an increase in jobs added and a slight reduction in the unemployment rate. Recent wage data showed growth of 3.4% over the year, exceeding the forecast of 3.3% and aligning with the first quarter’s figures. This is higher than the Reserve Bank of Australia’s prediction of 3.3%.
RBA Interest Rate Decisions
A steady employment growth is likely to influence the RBA’s interest rate decisions, ruling out any drastic rate cuts for the foreseeable future. Instead, a gradual decline in rates might be anticipated.
With the Australian jobs report due tomorrow, we’re watching the market’s reaction closely. Yesterday’s wage growth figures already surprised us, coming in hotter than forecast at 3.4%. This data makes it harder for the Reserve Bank of Australia (RBA) to justify a quick series of rate cuts.
The market has been pricing in at least two rate cuts from the RBA before the end of the year, a view that is now being seriously challenged. We saw a similar situation in early 2024 when persistent services inflation data forced markets to rethink the timing of global rate cuts. If tomorrow’s job number is strong, expect the pricing for the RBA’s cash rate, currently at 4.35%, to shift dramatically towards fewer cuts.
Australian Dollar Impact
A strong jobs report should provide a tailwind for the Australian dollar, which has been trading in a tight range around the 0.6650 mark against the US dollar. This scenario would favor trades that benefit from a rising AUD/USD, such as buying call options. We have seen the Aussie dollar jump by over half a cent on previous strong data releases, so a move towards 0.6700 is not out of the question.
For those trading interest rates, a hawkish shift from the RBA would put pressure on short-term bond and bill futures. We could see yields on 3-year government bonds, currently near 4.0%, push higher as traders sell off these contracts. This means positions that profit from falling futures prices, like selling futures or buying puts, could become attractive.
Volatility is something to watch leading into the announcement tomorrow morning. The implied volatility on one-week AUD/USD options has already ticked up to over 11%, reflecting this uncertainty. A major surprise, either much stronger or weaker than expected, could make options strategies that profit from a large price swing, regardless of direction, worth considering.
