UK DATA: KPMG-REC Report on Jobs: Candidate availability lowest since Dec20
- Following the ONS labour market release on Tuesday which showed a very soft payrolls print, the KPMG-REC Report on Jobs released overnight had some more gloomy details. Most notably, it showed that the availability of candidates rose at the quickest pace since December 2020 "amid reports of redundancies and fewer job opportunities."
- However, the decline in vacancies was the smallest in eight months and there were some increases in pay with the availability of candidates matching the skills required for new positions limited - and pay growth was below the long-term average.
- Overall, the increase in availability of candidates is likely to be the bigger driver here and it seems to add some credibility in the big decline in payrolls we have seen over the past few months - and the possibility that downtrend is accelerating.
- This is a report that the MPC watches and feeds into the narrative that an August cut looks increasingly likely. If we do start to see other indicators of the labour market (Agents, DMP, PMIs etc) start to point to as sharp a slowdown as the HMRC RTI payrolls and today's report it may increase the possibility of faster-than-quarterly cuts in H2-25 (which is a long way from being priced by markets).
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EURGBP TECHS: Trading At Its Recent Lows
- RES 4: 0.8768 High Nov 20 ‘23
- RES 3: 0.8624/0.8738 High Apr 21/ High Apr 11 and the bull trigger
- RES 2: 0.8541/8557 High May 2 / High Apr 28
- RES 1: 0.8465 50-day EMA
- PRICE: 0.8409 @ 06:53 BST May 14
- SUP 1: 0.8403 Low May 12
- SUP 2: 0.8400 Round number support
- SUP 3: 0.8359 1.236 proj of the Apr 11 - 16 - 21 price swing
- SUP 4: 0.8316 Low Mar 28 and a key support
EURGBP is trading at its recent lows. The cross traded to a fresh, short-term cycle low Monday, strengthening a bearish theme. It has also cleared support at 0.8465, the 50-day EMA, signalling scope for a continuation lower. Sights are on 0.8415 next, a Fibonacci retracement. This level has been pierced, a clear break of it would open 0.8400 and below. Key near-term resistance is 0.8541, the May 2 high. A break of it is required to signal a potential reversal.
EUROZONE ISSUANCE: EGB Supply
Belgium and Latvia are both likely hold syndications today while Germany and Portugal look to hold auctions today. The EU held a syndication yesterday, while the Netherlands, Italy and Germany yesterday held auctions. We pencil in estimated gross issuance for the week of E32.4bln, a little more than last week’s E31.8bln.
- Belgium has announced a syndication mandate for a benchmark bond maturing 22 October 2030 (OLO 105) in the near future, subject to market conditions. We had flagged the possibility of a 5-year OLO syndication as soon as this week in our issuance publications and look for the same E7.0bln transaction size that we saw at last year's 5y OLO launch today (albeit with downside risks).
- Latvia also has announced a syndication mandate, for a new 5-year EUR benchmark to be launched in the near future, subject to market conditions. We expect a transaction today, and think there is a good chance of a large transaction of E1.0-1.5bln.
- Germany will return to the market today to hold a 30-year Bund auction. On offer will be E1.5bln of the 1.25% Aug-48 Bund (ISIN: DE0001102432) alongside E1.0bln of the 2.50% Aug-54 Bund (ISIN: DE000BU2D004).
- Portugal will hold an OT auction today for a combined E1.00-1.25bln. On offer will be the 1.65% Jul-32 OT (ISIN: PTOTEYOE0031) and the 4.10% Feb-45 OT (ISIN: PTOTEBOE0020).
EUROSTOXX50 TECHS: (M5) Northbound
- RES 4: 5565.23 1.618 proj of the Apr 7 - 9 - 10 price swing
- RES 3: 5516.00 High Mar 3 and the key bull trigger
- RES 2: 5471.00 High Mar 19 / 20
- RES 1: 5410.00/5440.00 Tuesday’s peak / High Mar 25 and 26
- PRICE: 5391.00 @ 06:30 BST May 14
- SUP 1: 5152.85 50-day EMA
- SUP 2: 5055.00 Low Apr 30
- SUP 3: 4959.00/4812.00 Low Apr 23 / 16 and a key support
- SUP 4: 4664.00 Low Apr 10
A bullish theme in the Eurostoxx 50 futures contract remains intact. Gains on Monday reinforce current bullish conditions. The contract is extending the recent breach of 5263.01, 76.4% of the Mar 3 - Apr 7 bear leg. The continuation higher signals scope for a climb towards 5516.00, the Mar 3 high and the key bull trigger. Initial firm support to watch lies at 5152.85, the 50-day EMA. Clearance of this level would signal a possible reversal.
