CZECHIA: Real Wage Growth Averaged At +3.9% Y/Y In 1Q25
Jun-04 09:42
Local analysts point to robust wage growth, which only marginally undershot the CNB's expectations. Data showed that average real wages rose by 3.9% Y/Y, exceeding market consensus forecast of +3.7%.
- ČSOB write that average wage growth slowed in 1Q25 but only slightly, staying at an elevated level. They see a slowdown in the manufacturing sector coupled with robust wage dynamics in services. In their view, despite the uptick in unemployment, the labour market remains relatively tight and wage growth will cool only gradually, outpacing productivity growth this year. They think that the existing 'mini-inflation spiral' will translate into a cautious mood within the CNB.
- Komerční banka note that the purchasing power of the average wage increased by 2.1% Q/Q, the strongest growth since 1Q24, but real wages are still 2.8% below 4Q19 (the last quarter before the COVID-19 pandemic). They write that wage growth continues to be driven by the private sector. Komerční banka observe that in the key market sectors watched by the CNB, average nominal wage growth was +6.9% Y/Y, while the central bank expected +7.2%.
- Raiffeisenbank note that wages mainly increased for high-income employees, who have a higher tendency to save, but wages of low-income employees also rose, even if at a lower rate. They write that robust wage growth is good news for retail sales and broader economic growth, which continues to be driven by household consumption. They observe that the average gross wage has not yet surpassed its pre-COVID levels, but it has already done so in net terms due to tax changes.
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CROSS ASSET: The Dollar falls, Gold firms above $3,300.00
May-05 09:41
- Some downside continuation for the Dollar, testing intraday lows against the AUD, NOK, CZK, SGD, ZAR, GBP, JPY, and {o4} Gold has broken back above $3,300.00.
- AUDUSD is looking to break above 0.6500 ahead of the next resistance at 0.6528 High Nov 29 ‘24.
- USDJPY is eyeing 143.73, this was Friday's printed low.
BONDS: Initial resistance in Bund Holds, Focus on the US ISM Today
May-05 09:34
- A lighter start for the German Bund and wider EGBs, the UK Markets are closed for their Bank Holiday, and Investors are turning their attention towards the FOMC on Wednesday, and will remain attentive to any Tariffs news.
- The initial small resistance noted at 131.16 Today has held, so far printed a 131.14 high.
- European peripheral spreads are closer to flat on the Margin.
- The Swiss CPI came below consensus earlier but had no impact on Govies, even the Swissy (CHF) now trades at higher level post the Inflation Data.
- There's still some Focus on the Data front for Today, the US services PMI will be final reading, but some attention on the US ISM services and its components.
- ECB Stournaras will speak at Forum in Athens later today.
FOREX: Greenback Edges Lower in Partial Reversal of Friday Rally
May-05 09:27
- The greenback is modestly softer against all others in G10, as markets partially retrace the phase of USD strength posted into the Friday close. EUR/USD is back above the $1.13 handle, which is helping support EUR/GBP above 0.8500. Trade deals and negotiations remain a key focus this week, as reports circulate deals could be announced by Friday. Japan, India and South Korea are seen among the nations with the most advanced negotiations.
- Meanwhile, after an extended period of consolidation, AUD/USD is gaining following the surprisingly strong showing for Anthony Albanese in the weekend's general elections. The price action puts the rate above the 200-dma and a close above would be the first since November last year. 0.6550 is the next key level here, marking the 61.8% retracement of the downleg posted off the late September low.
- JPY is among the strongest currencies in G10, benefiting from the modest pullback for US equity futures as well as firmer regional APAC currencies. The run higher in TWD has seen the central bank respond with a press conference today which, while not disclosing any new measures, saw the central bank talk down speculation that Taiwan would settle for a firmer currency at the request of the US.
- US ISM services data is the scheduled highlight Monday, with central bank speak quiet as the Fed remain inside their pre-meeting media blackout.
