AUSTRALIA: Broad-Based Employment Growth In 2024
There has been some concern that the resilience of Australia’s labour market has been driven by the non-market economy, but Q4 was fairly broad-based with 11 of the 19 major sectors posting job gains accounting for 75% of total employment. This shows that the private sector is creating a significant number of new jobs. The continued lack of spare capacity in the labour market could keep the RBA on hold.
- We estimate market sector employment by excluding public administration & safety, education & training and healthcare & social assistance from the total. This measure rose 0.8% q/q in Q4 to be up 2% y/y with 81.6k new jobs created in the quarter to November and 192.2k in the 12 months to November 2024 – a solid result.
- Our proxy for non-market employment also rose 0.8% q/q in Q4 but its growth outperformed the market sector, as it has done since H2 2021, rising 3.3% y/y. As it accounts for around 30% of total employment, the number of new jobs in the 12 months to November 2024 was lower than the private sector at 143.8k but was down from 290.6k the previous year.
- The arts & recreation sector shed jobs in three of the four quarters in 2024 to be down 8.8% y/y and the worst performing sector. Other underperformers in 2024 included manufacturing and wholesale trade.
- Real estate, electricity & gas and accommodation & food services saw strong growth in 2024 with the first two sectors at double digit rates.
Australia employed y/y%
Source: MNI - Market News/ABS
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FOREX: USD Modestly Higher, Yen Pares Losses Post FinMin Warning
Early G10 FX trends are skewed towards the USD, albeit with modest moves overall. AUD and NZD are seeing some slight underperformance (which followed some outperformance on Monday). Rhetoric around FX moves has crossed from the Japan FinMin as well.
- The reaction so far from USD/JPY has been limited. We were last 157.15/20, close to unchanged for the session. Earlier highs were at 157.39.
- Japan FinMin Kato reiterated recent concerns on FX - "JAPAN FINMIN KATO: CONCERNED ABOUT RECENT FX MOVES, RTRS" "JAPAN FINMIN KATO: RECENTLY SEEING ONE-SIDED, SHARP FX MOVES" and that the authorities will take action against excessive moves.
- USD/JPY is still sub post BoJ highs (157.93), with these comments highlighting intervention risks as we approach the holiday period. Earlier the BoJ minutes from the Oct policy meeting came and went with little market reaction.
- AUD/USD sits down around 0.20%, last near 0.6235/40. Downside focus will rest on the 0.6199 low seen recently. The RBA minutes from the Dec meeting were out earlier. Upside risks to inflation have diminished but it was still too soon to be confident that inflation is sustainably at target.
- NZD/USD is also lower, last near 0.5635/40. Also, still up from recent cycle lows.
- Trends are biased in favour of the USD elsewhere, but aggregate moves are modest. In the cross asset space, US equity futures are down a touch, along with US yields, but again overall moves are modest.
- There is little in the way of further risk events for the remainder of today's Asia Pac session.
CHINA: Central Bank Drains Liquidity via OMO.
- PBOC issues CNY64.1bn of 7-day reverse repo.
- Today’s maturities CNY355.4bn
- Net Liquidity withdrawal CNY291.3bn.
- The PBOC controls liquidity in the interbank market through the daily issuance of reverse repo.
MNI: CHINA PBOC CONDUCTS CNY64.1 BLN VIA 7-DAY REVERSE REPOS TUES
- CHINA PBOC CONDUCTS CNY64.1 BLN VIA 7-DAY REVERSE REPOS TUES
