UK DATA: Brightmine Median Pay Awards At Lowest Level Since 2021 For Third Month
Brightmine median pay awards in the 3 months to February remained at 3.0%, the third consecutive monthly reading where pay awards have remained at the lowest level since December 2021.
- The press releases notes this is "marking a clear shift from last year's generous settlements" with "businesses reducing budgets, delaying pay decisions and considering pay freezes ahead of NIC [National Insurance Contribution] increases".
- Pay awards are now aligned with CPI inflation at 3% Y/Y, ending a 15-month period whereby it outpaced inflation.
- The press release also highlights the challenge of "maintaining pay differentials when lower-wage employees receive a large percentage increase [due to national living wage rise]... 74.3% of affected organisations expect a squeeze on differentials".
- The dispersion in pay awards remains at January's narrowed level with the interquartile range between 2.5% and 4.0%
- The rolling quarter of data is based on 102 pay settlements between 1 December 2024 and 28 February 2025 covering around 135,000 employees (vs 69 pay awards covering more than 95,000 employees between November 2024 and January 2025).
- A reminder ONS Labour Market data is due tomorrow which is expected to see a marginal slowdown in private sector AWE ex bonus on a 3M Y/Y basis, though overall AWE ex bonuses is expected to remain stuck at 5.9% 3M Y/Y. Survey data has pointed to a moderation in pay growth with the latest DMP survey showing realised wage growth slowed while the KPMG/REC survey showed salary growth at a 4-year low in February.
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MNI: MNI JAPAN Q4 REAL GDP +0.7% Q/Q; MNI MEDIAN +0.3%
- MNI JAPAN Q4 REAL GDP +0.7% Q/Q; MNI MEDIAN +0.3%
- JAPAN Q4 REAL GDP 2.8% ANNUALIZED; MNI MEDIAN +0.9%
- JAPAN Q4 CONSUMPTION +0.1% Q/Q; +0.1 PP CONTRIBUTION
- JAPAN Q4 CAPEX +0.5% Q/Q; +0.1 PP CONTRIBUTION
JGB TECHS: (H5) Fresh Lows
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 142.73/144.48 - High Dec 9 / High Nov 11
- PRICE: 139.69 @ 16:21 GMT Feb 14
- SUP 1: 139.46 - Low Feb 13
- SUP 2: 139.38 - 2.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 138.87- 3.000 proj of the Aug 6 - Sep 3 - 9 price swing
A clear downtrend in JGB futures firmed further, with the latest fresh cycle lows reinforcing the condition. Note too that MA studies on the continuation chart are in a bear-mode setup, highlighting a clear downtrend. The 140.00 psychological handle has been pierced. Markets have shown through 139.38, a Fibonacci projection. For bulls, a reversal would open 142.73 and 144.48, the Dec 9 and Nov 11 high respectively. Gains would be considered corrective.
JGBS: Weaker Overnight On Friday, US Tsys Rally On Weak Data, Q4 GDP Due
In post-Tokyo trade on Friday, JGB futures closed slightly weaker, -5 compared to settlement levels, despite a strong end to last week from US tsys.
- 2- and 10-year US tsys finished 5-6bps richer after a large miss in January retail sales (-0.9% M/M vs 0.7% prior, -0.2% consensus). It represented the biggest sequential drop in 22 months.
- A similarly weak "control group" figure led to a 0.5pp downgrade to the Atlanta Fed's GDP nowcast (to 2.3% GDP growth in Q1, i.e. no acceleration from Q4).
- This week’s US data schedule is relatively light, due in part to today's Presidents Day holiday (SIFMA recommends bond cash close, equities closed), with initial jobless claims, February prelim PMIs, and regional Fed manufacturing surveys among the highlights. Supply includes 20Y Bond and 30Y TIPS auctions.
- Today, the local calendar will see Q4 GDP (P) and December IP (F). The market expects a 0.3% q/q reading for GDP, unchanged from Q3 last year. Business spending is expected to rebound, but consumer spending is forecast to dip.
