Australia unemployment spikes to 3-year high in March

Raising likelihood of rate cuts.

According to BBVA, Australia's employment fell by a disappointing -36.1k in March (-7.5k). The labor participation rate also edged lower to 65.1% from previous previously. As a result, the unemployment rose to the highest level since November 2009, to 5.6%, from 5.4% previously.

BBVA said the disappointing Mach data underscores softness of the domestic economy, and increases the possibility of further Reserve Bank of Australia rate cuts in the coming months.

"That said, in light of monthly volatility in the data and stronger-than-expected February employment, we maintain our forecast of no rate cut by the RBA this year, following the 175 bp cumulative cuts in 2011-2012," BBVA added.