Australian Jobs Boom Fuels Bets for Another Rate Hike

Australia's employment numbers have surged past expectations in June, with the country adding 76,300 jobs to the economy. This is the largest increase since April last year and has markets wagering that another interest rate hike will be needed to combat inflation.

The Australian Bureau of Statistics reported that the jobless rate remained at 4.4%, but this was driven by a rise in participation rates, which reached a one-year high of 67.0%. The majority of new jobs were part-time positions, with hours worked edging up 0.2% after sliding in May.

Cameron McCormack, VanEck senior portfolio manager, noted that 'Australia's labour market is determined not to give the RBA the breathing room it needs'. This suggests that another rate rise this year is becoming increasingly likely, with markets narrowing the odds of a fourth hike in August to 33%.

The Reserve Bank of Australia has raised interest rates three times this year to combat inflation, which accelerated to an annual rate of 4% in May. The recent re-escalation of the conflict in the Gulf is pushing oil prices higher again, threatening to keep inflation elevated for longer.