AUSTRALIA: May Unemployment Rate Expected To Stay At 4.1%
Jun-18 02:13
May jobs data are released on Thursday and Bloomberg consensus is expecting labour market tightness to continue, one of the reasons the RBA remains cautious regarding the monetary policy outlook. Consensus is forecasting a 21.2k increase in new jobs, close to the 3-month average of 23k, with the unemployment rate is steady at 4.1%. In May the RBA projected 4.2% in Q2 and employment growth of 2.1% y/y.
- Employment forecasts are between +40k and -20k with most around +10k to +30k. ANZ and NAB are above consensus expecting 25k and 30k respectively, while CBA is slightly below at 20k and Westpac at 15k is the most pessimistic of the big four local banks.
- New jobs rose a stronger-than-expected 89k and 2.7% y/y in April. The data were released May 15, the day after the RBA cut off for its forecasting round. Thus, its 2.1% Q2 2025 projection looks too low and would require employment to fall 50k in both May and June.
- The unemployment rate was a low 4.1% in both March and April at 4.05% and 4.07% respectively. Consensus is very narrow with 20 analysts expecting it to remain at 4.1% and 7 a rise to 4.2%. ANZ, NAB and CBA forecasts are at 4.1%, while Westpac has it rising to 4.2%.
- To achieve the RBA’s average 4.2% in Q2, the unemployment rate would need to rise 0.1pp in both May and June.
- The participation rate is projected to be unchanged at 67.1% in May. It rose 0.3pp in April.
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AUSSIE BONDS: Subdued Session Ahead Of Tomorrow's RBA Policy Decision
May-19 02:12
ACGBs (YM -1.0 & XM -3.0) are modestly cheaper on a data-light Sydney session ahead of tomorrow’s RBA Policy Decision.
- Cash US tsys have twist-steepened in today’s Asia-Pac session, with yields 2.5bps lower to 2.5bps higher, as the market continues to digest late Friday news that Moody's Ratings downgraded the US credit score.
- “The move follows downgrades by Fitch Ratings and S&P Global Ratings, with Moody's citing a decline in fiscal metrics that can no longer be counterbalanced by the US' economic and financial strengths." (per BBG)
- Cash ACGBs are 1-3bps cheaper with the AU-US 10-year yield differential at flat.
- The bills strip little changed.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in May is given a 94% probability, with a cumulative 76bps of easing priced by year-end (based on an effective cash rate of 4.09%).
- (AFR) “The consumer price index for the March quarter was a good enough result to warrant a 25 basis point policy rate cut at the May Reserve Bank board meeting, but that is about it.” (see BBG link)
- This week, the AOFM plans to sell A$1200mn of the 4.25% 21 December 2035 bond on Wednesday and A$800mn of the 2.75% 21 November 2028 bond on Friday.
MNI: CHINA APR INDUSTRIAL OUTPUT +6.1% Y/Y VS MEDIAN +5.7% Y/Y: NBS
May-19 02:00
- CHINA APR INDUSTRIAL OUTPUT +6.1% Y/Y VS MEDIAN +5.7% Y/Y: NBS
- CHINA JAN-APR INDUSTRIAL OUTPUT +6.4% Y/Y VS JAN-MAR +6.5% Y/Y
- CHINA APR RETAIL SALES +5.1% Y/Y VS MEDIAN +5.9% Y/Y
- CHINA JAN-APR RETAIL SALES +4.7% Y/Y VS JAN-MAR +4.6% Y/Y
- CHINA YTD FIXED-ASSET INVESTMENT +4.0% Y/Y VS MEDIAN +4.2% Y/Y
- CHINA YTD PROPERTY INVESTMENT -10.3% Y/Y VS MEDIAN -10.0% Y/Y
- CHINA APR UNEMPLOYMENT RATE +5.1% VS MAR +5.2%
CHINA: House Prices Down Shanghai a Brightspot (updated)
May-19 01:53
- April's house price data continued to highlight the challenges for authorities in achieving a recovery in the multi-year downturn in house prices.
- April's new house prices decline increased from March to -0.12%, representing 23 consecutive months of contracting.
- April's used house prices decline increased from March to -0.41%, representing a contraction in every month since the last expansion in April 2023.
- New home prices did rise in 22 cities MoM compared to March and 3 cities saw growth YoY.
- Used home prices in 5 cities rose MoM.
- Beijing saw a rise in new home prices of +0.01% MoM yet declined -5% YoY.
- Shanghai saw a rise in new home prices of +0.5% MoM whilst delivering a +5.9% YoY increase.
