(Adds analyst comment on CPI) By Wayne Cole SYDNEY, Oct 16 (Reuters) – The Australian dollar slipped on Thursday after data showed unemployment jumped to a near four-year high as jobs growth continued to slow sharply, a shock result that rekindled pressure for a near-term rate cut. The Aussie fell 0.3% to $0.6489 after the government reported unemployment spiked to 4.5% in September, the highest reading since late 2021 and above forecasts of 4.3%. The result contrasted markedly with the Reserve Bank of Australia's assessment that the labour market was "stable", and with its forecast that unemployment would peak at 4.3%. Investors responded by boosting the chance of a November cut in the 3.60% cash rate to 75%, from under 50% before the data. Futures also sharply narrowed the odds on rates falling to an eventual floor of 3.10%. Abhijit Surya, a senior APAC economist at Capital Economics, cautioned that the jobs data had shown spikes in unemployment before only to reverse the following month. "On balance, our sense is that today's soft jobs will bring the RBA a bit closer to cutting rates by 25bp at its meeting in November," he said. "However, given the bank's ongoing concerns about the stickiness of inflation, an upside surprise in the Q3 CPI data could still tilt the scales in favour of a hold." Earlier in the session, RBA Governor Michele Bullock had described the labour market as still a little tight and said the board was considering whether more easing was needed. Consumer price figures for the third quarter are due at the end of October, and the RBA is concerned monthly figures are pointing to the risk of an upside surprise. "We are highly sceptical about how much signal can be drawn out of what is a partial, incomplete and volatile monthly inflation indicator," said Paul Bloxham, head of Australian economics at HSBC. "We are much less confident that the monthly CPI signals a strong upside risk," he added. "Our central case is that the RBA will cut by 25bp on November 4, with a further final 25bp cut in February." Bond markets took the jobs data at face value and rallied hard, with two-year futures jumping 10 ticks to 96.625. Ten-year bond yields fell 7 basis points to 4.161%, and touched their lowest since early July. The kiwi firmed 0.4% to $0.5745, edging away from Monday's six-month trough of $0.5684. (Reporting by Wayne Cole; Editing by Shri Navaratnam and Muralikumar Anantharaman)
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