The US economy added 236K jobs in March, marginally lower than the expectations of 240K and critical lower than the prior release of 326K. The Unemployment Rate trimmed further to 3.5% from the consensus and the former release of 3.6%. Lower additions of fresh payrolls indicate that more rate from the Federal Reserve (Fed) are restricting firms to tap advances for expansion, which is impacting the demand for labor further.

Average Hourly Earnings were trimmed to 4.2% vs. the estimates of 4.3% and the former release of 4.6%. However, on a monthly basis, the labor cost index improved to 0.3% from the prior release of 0.2% but remained in line with expectations, which indicates that higher employment bills could continue to keep inflationary pressures at elevated levels.

Going forward, Chinese Consumer Price Index (CPI) data will be the key highlight. The annual inflation data is expected to soften dramatically to 0.1% from the former release of 1.0%, which indicates bleak demand from households. This might impact the economic outlook of China as the economy is struggling to show stellar recovery despite re-opening of the economy.

It is worth noting that Australia is the leading trading partner of China and lower households demand in China would impact the Australian Dollar.