NEW ZEALAND: Ongoing Labour Market Recovery Modest, Wages Contained
The labour market continued its modest recovery in Q1. The unemployment rate was lower, there was job growth in both full-time (FT) and part-time (PT) sectors and hours worked were higher. While the unemployment rate dip to 5.3% was in line with the RBNZ’s February forecast, employment growth was softer. Wage growth also remained contained, thus labour market conditions argue for the RBNZ to remain on hold but the onset of the Iran War has complicated decision making. The next announcement is 27 May.
- Employment rose 0.2% q/q to be up only 0.4% y/y after 0.5% q/q & 0.2% y/y. The RBNZ projected in February an increase of 0.4% & 0.7%. The majority of job growth was in part-time positions suggesting employer caution. PT rose 0.5% q/q with FT up 0.1% q/q.
NZ employment y/y%
Source: MNI - Market News/LSEG
- The unemployment rate eased 0.1pp to 5.3% as the participation rate fell 0.1pp to 70.4%. Also the number of unemployed was down 1.2% q/q, the largest quarterly decline since Q4 2021. However, youth not in employment or education/training rose 1.1pp to 14.4% in Q1, which as a lead indicator signals ongoing labour market weakness.
- Hours worked increased 0.8% q/q to be up 2.2% y/y. The underutilization rate remains high though at 12.9%.
- Private wages including overtime rose 0.4% q/q, as expected, but excluding overtime were stronger at 0.5% q/q but only 2.0% y/y unchanged from Q4. Wage growth is currently not a problem for the inflation outlook and with labour demand still moderate, high pay outcomes are unlikely.
- Private average hourly earnings were also moderate up 0.2% q/q and 3.6% y/y. Total labour costs rose 0.5% q/q & 2.0% y/y.
NZ wages y/y%
Source: MNI - Market News/LSEG
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GOLD: Gold Test Key Tech Level as US Threats Boost USD
- Gold ended Thursday's trading day on the backfoot, finishing down -1.7% at the close at US$4,676.
- The move last week higher has seen bullion consolidate above the key level of $4,500 but it has opened trading Monday weaker again down almost 1% at US$4,633.
- Today's moves leaves gold testing the 100-day EMA of $4,627. A consolidated break below could then see $4.500 as the next key resistance and potentially bring the 200-day EMA into play at $4,252.
- Trump's threat to destroy power plants in Iran has given the USD a bump Monday, pressuring gold. With Iran showing little interest in the US threats the possibility of further escalation this week is growing.
- For now it seems to have sufficient support above $4.500 but with momentum indicators broadly neutral, it will remain in a push pull scenario around safe haven status, higher rates and strong USD.
GOLD: Viewpoint Of The Importance Of Gold
Craig Tindale wrote an article articulating his views on Gold and why it should be an integral part of any portfolio. For those looking to find some reading material on a potentially quiet day, please find the link attached.
- "If you insist on seeing gold only through the dollar quote, you will misunderstand it at the very moment you most need to understand it. You will think you are looking at a trade."
- "You are really looking at a reserve of claim in a civilisation that has spent too long confusing price with value, symbols with substance, and monetary fluency with command over the material world."
https://x.com/ctindale/status/2040918715961901280?s=20
ASIA: Government Bond Issuance Today
- Bank of Korea to Sell 500B Won Zero-Coupon 91-Day Bonds
- South Korea to Sell 3.1T Won 2.75% 3-Year Bonds
- Philippines to Sell PHP9 Billion 91-Day Bills
- Philippines to Sell PHP9 Billion 182-Day Bills
- Philippines to Sell PHP9 Billion 364-Day Bills o
