MNI EXCLUSIVE: Outlook For German FDI Into China Next Year

October jobs data print on Thursday and analysts are again forecasting a 25k rise in employment but with the unemployment rate remaining steady at 4.1%. Australia’s big four domestic banks are divided between a lower- or higher-than-expected jobs print.

• ANZ is forecasting 35k new jobs with the unemployment rate steady at 4.1%. It added “the recent stabilisation in ANZ-Indeed Jobs Ads suggests the risks of a sharp step down in trend employment growth are receding. The increase in labour supply is helping to meet the robust demand for employees evident over the past year.”
• NAB expects a 30k increase in employment and a 4.1% unemployment rate. It believes that “risks appear two sided here with last month being close to the rounding barrier at 4.067%. The RBA in their latest SoMP had forecast the unemployment rate averaging 4.3% in Q4 2024 and peaking at 4.5% in mid-2025. Should unemployment fall back to 4.0%, it would challenge that forecast profile.”
• CBA is more pessimistic forecasting a 20k rise in new jobs and a 0.1pp uptick in unemployment to 4.2% driven by strong labour supply. It observes that the unemployment rate “remains below most estimates of full employment.” “The RBA will be watching the data closely and probably needs to see a continued easing before being comfortable in reducing the cash rate. Weak GDP growth, leading indicators of the labour market and our own internal data continue to suggest that employment growth should soften.”
• Westpac’s forecasts are in line with CBA’s. It notes that “October, being the first month of the quarter, will include an updated estimate of working age population growth.” Also, “the final quarter of the year is usually softer for population growth. We are therefore unlikely to see employment continue to rise at the scale seen in recent months.”

Spot gold fell by another 0.8% to $2,598.39/oz on Tuesday, as higher US yields and pressure on major equity indices prompted further gains for the US dollar.

• However, bullion has recovered some of the lost ground in today’s Asia-Pac session, up 0.5%.
• It was a heavy session for US Treasuries on Tuesday in the lead-up to today’s key October CPI inflation data. It will be followed by PPI on Thursday.
• The US 10-year cheapened 12bps to 4.43% and the 2-year yield rose 9bps to 4.34%. Concerns over potentially inflationary aspects of Trump's fiscal policies likely exacerbated selling.
• Minneapolis Fed President Kashkari suggested on Tuesday that it could take significant upside inflation surprises in the next two months to cause the Fed to deviate from cutting rates a third consecutive time at the next meeting.
• Lower rates are typically positive for gold, which doesn’t pay interest.
• According to MNI’s technicals team, yesterday’s move brought the yellow metal below the $2,600 level earlier for the first time since September 20, down more than 5% since last week’s US election.
• The latest pullback appears to be corrective, although recent weakness has resulted in a breach of the 50-day EMA, signalling scope for a deeper retracement towards $2,547.0, the Sep 18 low.