A steady 4.1% jobless rate and another fall in total unemployment should keep rate hike risk priced, supporting AUD and holding front-end yields firm. It doesn’t force a March move, but it keeps the RBA’s finger on the trigger.Summary:Employment rose 17.8k in January, broadly in line with expectationsFull-time jobs surged 50.5k, offset by a 32.7k fall in part-time rolesUnemployment rate steady at 4.1%, below RBA February forecastsHours worked climbed 0.6% m/m, signalling firm labour demandData do not lock in a March hike but tilt risks further toward tighteningAustralia’s January labour force data delivered a broadly “as expected” headline but a firmer underlying message, keeping the Reserve Bank of Australia’s tightening bias alive.Total employment rose by 17,800 in January, close to consensus forecasts near 20,000, and a clear step down from December’s outsized 65,200 gain. The more important detail was the composition: full-time employment surged 50,500, partly offset by a 32,700 decline in part-time roles. The skew toward full-time jobs points to resilient labour demand rather than an abrupt cooling.The unemployment rate held steady at 4.1%, beating expectations for a slight lift to 4.2%. Participation was unchanged at 66.7%, marginally below consensus but stable enough to suggest labour supply is no longer adding upward pressure to unemployment. Adding to the “tight market” signal, hours worked rose 0.6% over the month — a solid increase that indicates employers are still utilising labour intensively.A notable takeaway was the continued decline in the total stock of unemployed persons, which fell for a fourth consecutive month in January. The last time unemployment fell four months in a row was in the four months immediately before the RBA began its rate hiking cycle in May 2022. While the labour force survey is notoriously volatile, the persistence of this trend supports the argument that labour market slack is not building in a meaningful way.For the RBA, the report does not lock in a March rate hike by itself, but it moves policymakers closer. The unemployment rate remains well below the RBA’s February Statement on Monetary Policy track, and there is nothing in the release to challenge the Bank’s assessment that labour market conditions are still relatively tight. If inflation pressures remain uncomfortable, these labour numbers leave the door wide open to further tightening. This article was written by Eamonn Sheridan at investinglive.com.

I posted a preview of the jobs data here:Australia’s January labour force data due today - previewPosting the data now, and I'll have more to come on separately, analysis and implications etc.Added - Here is more: Australia unemployment total falls for fourth straight month. RBA March rate hike prospectWow ... this will ignite further chatter of a March rate hike by the RBA. This article was written by Eamonn Sheridan at investinglive.com.

The FOMC minutes stated that Jerome Powell was selected to serve as Chair for 2026, with the appointment lasting until a successor is formally chosen.In practical terms, that means Powell would continue to preside over the FOMC, including at meetings later than May, provided he remains a Federal Reserve Governor and the incoming Chair (Kevin Warsh) has not yet been confirmed and installed.The language in the minutes serves as a reminder of the Committee’s standard governance framework: the sitting Chair remains in place by default until a confirmed successor officially assumes the role.Summary:FOMC minutes reaffirm Powell as chair “until a successor is selected,” a key governance default. Warsh’s confirmation timeline is at risk of slipping, creating a longer “interim chair” window. Sen. Thom Tillis is threatening to block Fed nominees until the DOJ probe into Powell is resolved. Democrats are also pressing to delay proceedings, arguing investigations undermine confidence in the process. Bottom line: Powell remains FOMC chair by default until a successor is confirmed and formally in place.FOMC minutes underscore a core governance reality that can get lost in the politics of Fed succession: the sitting chair remains chair until the successor is formally selected and installed. The minutes’ officer-election language is effectively a “default setting,” designed to prevent a vacuum if confirmation timing slips.Why does that matter now? Because the next-chair process looks unusually messy. President Trump has said Kevin Warsh is his pick to succeed Jerome Powell when Powell’s chair term ends in mid-May. But Warsh may not be confirmed in time, not necessarily because the Banking Committee chair is blocking him, but because a key Republican vote may be unavailable.Republican Sen. Thom Tillis (North Carolina), who sits on the Senate Banking Committee, has publicly tied his support for any Federal Reserve nominees to the outcome of a Justice Department investigation involving Powell. Tillis has framed the probe as an attack on Fed independence and has said he won’t allow nominees to advance until the matter is resolved. That matters because committee math is tight. If Democrats line up against Warsh in committee, a single Republican defection can prevent the nomination from being voted out to the full Senate. Reporting has explicitly highlighted Tillis’s hold as an early hurdle for Warsh’s timeline. Complicating things further, Senate Banking Committee Democrats have also pushed for nomination proceedings to be delayed until what they describe as “pretextual” investigations involving Fed officials are closed, arguing the optics risk undermining confidence in the Fed’s independence. There have been signs of a possible procedural workaround, including the idea of proceeding with hearings even if a committee vote is held up, but the core point remains: if the nomination is delayed in committee or the White House nomination paperwork arrives late, the transition window stretches. That’s where the minutes’ governance reminder becomes market-relevant. In a prolonged transition, Powell remains the de facto FOMC chair “until he’s not,” and uncertainty shifts from who is chair today to how politicised and protracted the handover becomes, especially with Fed-independence narratives already live. This article was written by Eamonn Sheridan at investinglive.com.

Japanese firms remain wary of fiscal discipline under Takaichi, even as concerns over China tensions ease.Summary:Two-thirds of Japanese firms express concern about PM Takaichi’s fiscal disciplineMarkets rattled by proposed temporary food tax suspensionIMF urges fiscal restraint to maintain bond market stabilityFewer firms now fear business fallout from China tensionsWeaker yen and higher borrowing costs seen as main risksEarlier re weak yen: JP Morgan raise their forecasts for AUD, NZD and for USD/JPY (EUR/USD unchanged)Two-thirds of Japanese companies are concerned about the government’s fiscal discipline under Prime Minister Sanae Takaichi, according to a Reuters corporate survey, underscoring lingering unease in the business community despite recent efforts to calm bond markets. The concern follows Takaichi’s proposal to temporarily suspend the 8% sales tax on food for two years and increase investment spending to support growth. The announcement, made ahead of last month’s snap general election, unsettled investors and drove long-dated Japanese government bond yields to record highs as markets questioned how the measures would be financed. Although Takaichi subsequently pledged to pursue “responsible” stimulus and avoid issuing new debt to fund the tax cut, corporate scepticism appears to persist.Survey results show 11% of firms are “greatly concerned” about fiscal discipline, while 55% are “somewhat concerned.” Only 30% report limited worry. Among those uneasy about fiscal policy, 64% cite the risk of a weaker yen raising raw material import costs, while 55% are concerned about higher borrowing costs. Businesses indicated they may reassess capital expenditure plans, adjust funding strategies or curb wage growth if fiscal-related risks materialise.Japan already carries the highest public debt burden among developed economies, a structural vulnerability that heightens sensitivity to any perception of fiscal loosening. The International Monetary Fund has also cautioned that while limiting tax cuts to essential goods and ensuring they are temporary could help contain costs, broader fiscal restraint remains important to anchor bond market stability.Separately, the survey suggests concerns about diplomatic tensions with China have moderated. Around 18% of firms now expect strained relations to affect business, down from 35% in January. The share anticipating little impact rose to 73%. While some companies continue to view China as a critical market, others report efforts to diversify supply chains and reduce exposure amid recurring tensions.Overall, the results highlight a corporate sector navigating fiscal uncertainty at home while cautiously recalibrating geopolitical risk abroad. This article was written by Eamonn Sheridan at investinglive.com.

Summary:JPMorgan says renewed FX hedging by foreign investors could add fresh pressure on the US dollarStronger non-US currencies are increasing incentives to hedge US equity exposureFed rate hikes are seen as off the table, reducing yield support for the dollarAUD and NZD forecasts upgraded; upside risks flagged for EURBank remains bearish on JPY, sees USD/JPY at 164 by Q4Bloomberg carried the piece, in brief:JPMorgan strategists say a fresh wave of foreign-exchange hedging could add another layer of pressure to the US dollar, as overseas investors seek protection against further currency weakness on their US asset holdings.According to the bank, global investors, many of whom hold sizeable allocations to US equities, are increasingly exposed to currencies that have strengthened sharply against the greenback. As those currencies push toward multi-year highs, the incentive to hedge dollar exposure rises. That process typically involves selling dollars forward, creating additional headwinds for the currency.The strategists argue that the reactivation of FX hedging flows is a key reason to remain bearish on the dollar. They note that demand for downside dollar protection has been building since the Trump administration unveiled aggressive trade measures in April, a development that contributed to one of the dollar’s weakest annual performances in nearly a decade during 2025. While the Bloomberg Dollar Spot Index later stabilised and traded in a relatively narrow range in the second half of the year, renewed currency strength elsewhere is now reviving hedging dynamics.Beyond hedging flows, JPMorgan cites a broader macro backdrop that is no longer supportive for the dollar. Federal Reserve rate hikes are seen as firmly off the table for now, narrowing yield support, while portfolio flows continue to rotate away from US equities. The bank observes that the recent dollar decline has accelerated more quickly than expected, with several downside targets reached ahead of schedule.In terms of currency preferences, the strategists see further gains for the Australian and New Zealand dollars. They have raised their Australian dollar forecast to $0.73 in the second quarter of 2026, from $0.68 previously, pointing to the prospect of additional Reserve Bank of Australia tightening. The New Zealand dollar forecast was also upgraded to $0.63 from $0.59. Upside risks to the euro are acknowledged, with a $1.20 projection maintained.By contrast, JPMorgan remains bearish on the Japanese yen, citing an unfavourable domestic policy mix and an unsupportive global monetary backdrop. The bank expects the yen to weaken toward 164 per dollar by the fourth quarter, despite ongoing speculation about possible intervention. This article was written by Eamonn Sheridan at investinglive.com.