AUSTRALIA DATA: SEEK Data Show Easing Jobs Market
SEEK new job ads fell 0.6% m/m in May after a sharp 4.9% drop in April. They are now down 17.9% y/y after -18.6%. While 3-month momentum is still negative, it is not as weak as it was. Growth in applicants per job slowed to +0.3% m/m in April but is still up almost 60% y/y. Labour demand remains robust but is now well off its 2022 peak, while supply has increased considerably. May employment data print on Thursday and a small drop in the unemployment rate to 4% is expected (see MNI preview).
- The May weakness was not broadbased across Australia with it driven by NSW, Queensland and Victoria. Job ads rose in the smaller states, but all regions are down on the year.
- Again the May drop was not consistent across sectors with those dominated by the public sector showing increases, such as education and healthcare. Surprisingly the struggling retail sector posted a 0.9% m/m rise to be down 15% y/y. Trades & services fell 1.6% m/m and 16.1% y/y.
Source: MNI - Market News/SEEK
Australia SEEK applicants/job ad index 2013=100
Source: MNI - Market News/SEEK
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AUSTRALIA DATA: April Price/Cost Pressures Softer Than Q1
NAB’s measure of business confidence was stable at 1 in April but conditions eased further to 7 from 9, only slightly above the series average. Confidence has been fairly steady around 1 through 2024 but conditions have eased 3 points since December and 18 points since the September 2022 peak. The main activity components eased further with employment now below the historical average, while April price/cost components moderated compared with Q1.
- Employment fell 4.5 points to 1.9, which is still signalling positive labour demand but at a lot slower pace than it had been previously. It was the lowest reading since January 2022.
Source: MNI - Market News/Refinitiv
- Forward looking orders fell to -7.2 from -1.4, the lowest since the Covid-impacted August 2020. NAB says that the deterioration was due to large drops in mining, manufacturing and construction, while retail and wholesale are also negative.
- On a more positive note, capacity utilisation was unchanged and investment high.
- Labour costs moderated to 1.5% over 3-months from 1.7%, the lowest since September 2021 but still above the post-2000 average. Purchase costs eased to 1.2% from 1.5%, in line with average.
- Prices of final products rose 0.9% over 3-months up from March’s 0.7% but retail moderated 0.5pp to 0.9%. Both are below the Q1 average though signalling that the start of Q2 saw a moderation in price pressures.
- Services are facing better business conditions while retail are the “most concerning”.
- See NAB survey here.
Source: MNI - Market News/Refinitiv
FOREX: Risk Off Evident In G10 Currencies, USD/JPY Dips Supported Despite Higher Yields
G10 forex trends have reflected a more risk off tone in recent dealings. The BBDXY is a touch higher, last near 1254.4, with AUD and NZD underperforming against the majors.
- USD/JPY gapped lower to 155.50/55 as the BoJ curbed its bond buying ops for the 5-10 year tenor compared to the late April operation. JGB yields are pressing higher, with the 10yr at multi month highs near 0.94%.
- Still, USD/JPY dips have been supported, the pair is back to 155.85 in latest dealings. We haven't been able to test 156.00 yet though.
- AUD/USD is down 0.25% to sub 0.6590. The weaker tone to China equities, followed weaker credit data from the weekend and looming US tariff increases is a factor. Equity trends are mostly negative elsewhere as well.
- On the data front, the NAB business conditions print for April was close to unchanged (+7, versus +9 prior0. Confidence was steady at +1.
- NZD/USD has also weakened, down 0.20% to 0.6010.
- We still have NZ inflation expectations due in around an hour.
CHINA PRESS: Sino-German Relationship Lowers EU Trade Tensions
The EU will be less likely to take protectionist measures against China given Germany’s strong economic relationship with Beijing, according to Zhu Ying, professor of economics at Shanghai Normal University. Germany plays a special role in China's economy and trade relations, with about 5,000 firms operating in the country, Zhu added. Automakers from Germany are increasingly relying on Chinese teams for R&D in areas such as autonomous driving, where Europe is not advanced. (Source: Yicai)
