In what is shaping up as a massive story, the Aussie unemployment rate has fallen from 5.3% to 5.2%.

As a result the AUD/USD has seen a sharp jump higher. The real reason behind this is that the RBA has linked its monetary policy to what is going on with employment.

They want to use low rates to stimulate employment, in a bid to lift wages and then inflation.

A falling jobless rate is finally a step in the right direction and Lowe and co. will be very happy this morning. The headline number came in at 14.7K vs 15K expected so virtually in-line on that front. It was down sharply on the prior. But the focus is clearly on the jobless rate and will be for some time now.

The AUD is already higher up +0.35% at last count. We are now in-line for a test of 0.6800 in the coming session and if that holds, we could really think that we have put in a short-term bottom for now.

More Property Worries for the RBA

Speaking this morning in Australia, deputy RBA Governor Debelle has come out and said he expects to see another push higher in property prices, given the tightness of demand.

With record-low interest rates, an asset boom is always a big risk as investors hunt yield elsewhere.

We’ve already seen a big boom in prices over the recent years in places like Sydney and Melbourne. If things look like they could be going that way again, I feel it would no doubt have an impact on the RBA and what they might do.

To the point that they could even slow down their rate cuts as a result.