Labour market to tighten, trade tensions to persist

Some analysts have expressed optimism that the signing of the RCEP will help ease trade tensions between Australia and China, but we doubt the agreement will do much to calm the waters. Meanwhile, the sharp rise in the Australian participation rate in October means the labour force is now larger than it was in February. Future gains in employment are therefore unlikely to be offset by rising participation which supports our non-consensus view that unemployment will fall rather than rise over the coming months.