Australia’s employment jumps in February, jobless rate still rises

Net employment in Australia rose 48,900 in February (vs. a 20,000 forecast), driven by a 79,400 surge in part-time jobs while full-time jobs fell 30,500; the unemployment rate ticked up to 4.3% and participation rose to 66.9%. Hours worked fell 0.2%, signaling some softening even as the labour market remains relatively resilient; the RBA has already hiked rates twice and markets price ~57% chance of a further 25bps hike to 4.35% in May. Economists flag downside risk from Middle East disruptions to oil and gas routes, which could sustain inflationary pressure and complicate the RBA outlook.

Analysis

The Musk-led continuation of large OEM orders for Nvidia creates an earnings cadence that increasingly looks driven by a small set of high-volume partners rather than broad-based consumer demand; that concentration both raises revenue visibility for NVDA and creates counterparty negotiation risk if those partners push for customized silicon or volume discounts. From a supply-chain angle, sustained OEM demand accelerates upstream capital intensity (substrates, packaging, test) and keeps lead times tight — a rising probability that incremental sell-through will be supply-constrained rather than demand-constrained over the next 6-12 months.

Monetary tightening and geopolitically-driven energy shocks push the effective discount rate higher and amplify valuation sensitivity for long-duration names like NVDA and TSLA; expect multiple pressure in 3-6 months if central banks deliver more hikes or if oil-route disruptions worsen. Conversely, structural demand for AI/vehicle compute is less rate-elastic than retail EV purchases, creating a divergence: NVDA can see margin and pricing power resilience while TSLA’s near-term volumes remain vulnerable to financing/headroom constraints.

For AMP and Australian financials, higher policy rates create a two-headed outcome — net interest-type revenues and yield on client cash improve faster than AUM-linked fees, but market volatility and potential equity drawdowns compress fee growth and can accelerate client rebalancing to cash. The labour-force dynamics (older cohorts delaying retirement) incrementally tilt product demand toward retirement-income and annuity-like solutions over a multi-year horizon; that’s a structural product mix shift AMP can monetise if distribution and product design scale quickly.

Key Decisions for Investors

• NVDA — Bullish, 2-3% portfolio notional via options: buy 9–15 month NVDA calls (target delta ~0.35) sized so max premium = 2% portfolio. Rationale: capture continued OEM-led book-and-build with limited capital outlay; target 40–60% upside over 6–12 months, stop-loss at 30% of premium lost or if NVDA issues material OEM-design wins to competitors.
• TSLA — Tactical, 1.5% portfolio notional long-dated call position (12–18 month LEAPs) funded by selling 3–6 month OTM calls (covered-call collar): objective to participate in upside from AI/robotaxi optionality while monetizing near-term implied volatility. Reward: asymmetric upside if compute-led narrative persists; Risk: financing-cost sensitivity could compress volumes—cap sizing limits downside to ~1.5% notional.
• AMP.AX — Opportunistic long, 2% portfolio allocation to equity (or equivalent ETF exposure) for 3–6 month horizon: thesis rests on higher rates improving cash-product economics and deposit margins. Target 15–25% return if net interest-type revenues beat guidance; stop at 10% drawdown linked to Australian equities de-rating or AUM outflows.
• Macro hedge — Tail protection: allocate 0.5–1% portfolio to short-dated (1–3 month) put protection on NVDA or an index-heavy tech put to guard against a rate/geopolitics-driven multiple compression. This limits gamma risk to a known small cost while protecting concentrated long tech exposure from a rapid policy pivot.