PHILIPPINES: Unemployment Rae Back Under 4%, Adding To BSP Hold Case
The Philippines unemployment rate fell back to 3.9% in August. This was a sharp retracement from July's 5.3% outcome. At face value this should provide some comfort to the BSP that the July outcome was not the start of a sharp weakening in local labour market conditions. The central bank meets tomorrow, with the consensus looking for no change (although some forecasters see a 25bps cut).
- The unemployment rate is now back under 4%, which is consistent with a relatively steady backdrop seen in recent years, see the chart below.
- The detail showed sharp shifts in the participation rate. From July when we printed at 60.7%, we were back to 65.1% in August, suggesting people moving in and out of the labour force contributed to the recent volatility in the jobless rate.
Fig 1: Philippines Unemployment Rate Back Under 4%
Source: Bloomberg Finance L.P./MNI
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CNH: USD/CNY Fixing To Fresh Lows, Fixing Error Slightly Tighter
The USD/CNY fix printed at 7.1029, versus a BBG market consensus of 7.1323.
- Today's fixing delivered a fixing error of -294pips, tighter than Friday's outcome, but within recent ranges.
- The actual fix is a fresh low back to Nov 6 (7.0993) from last year.
- USD/CNH tracks near 7.1270 in latest dealings, supported under 7.1250 post the fixing. Friday lows were at 7.1218.
- CNH is outperformed the weaker yen trend (in the aftermath of PM Ishiba stepping down), but this may be a constraint on USD/CNH downside in the near term.
CHINA SETS YUAN CENTRAL PARITY AT 7.1029 MON VS 7.1064
- CHINA SETS YUAN CENTRAL PARITY AT 7.1029 MON VS 7.1064
FOREX: AUD Crosses - Hold Gains, AUD/JPY Moves Higher On Ishiba
US Equities fell on Friday unable to hold their gains on the poor labour data which will have implications for growth going forward. This morning US futures have opened higher in sympathy to the move in Asian stocks being led by the Nikkei in response to Ishiba stepping down, E-minis +0.20%, NQU5 +0.35%. The AUD continues to hold its gains in the crosses
- EUR/AUD - Overnight range 1.7815 - 1.7914, Asia is currently trading around 1.7860. The pair has drifted back towards its first support around the 1.7800 area, decent demand continues to be seen towards here first up, below there the next support is around 1.7600.
- GBP/AUD - Overnight range 2.0548 - 2.0635, Asia is trading around 2.0590. The pair found some solid demand around 2.0500 and bounced last week, expect sellers above 2.0700 initially. The wider range of 2.0400-2.1000 continues to contain.
- AUD/JPY - Overnight range 96.32 - 97.00, Asia is trading around 97.25. The pair looked to have topped out again after NFP, but this morning’s Ishiba news has thrown a spanner in the works. A sustained break above 97.50/98.00 is needed to reignite the upward trend.
- AUD/NZD - Overnight range 1.1115 - 1.1144, the cross is dealing in Asia around 1.1130. The Cross is consolidating above 1.1100, dips back towards 1.1000/1.1050 should be supported now.
Fig 1: AUD/JPY spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
