MNI China Daily Summary: Friday, April 26

MNI BRIEF: China, US Should Strengthen Dialogue, Cooperation

MNI BRIEF: SNB Framework Reform 'Playing With Fire' - Steiner

MNI: PBOC Conducts CNY2 Bln Via OMO Fri; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS FRI

MNI: PBOC Sets Yuan Parity Lower At 7.1056 Fri; -4.56% Y/Y

MNI: BAKER HUGHES US RIG COUNT 613; OIL RIGS 506; GAS RIGS 105

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT FINAL APR INDEX 77.2

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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BOE DMP details look soft

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Looking in more detail at the DMP, there is further softness in the survey when looking at the details. We still don't think this is enough to increase the risks of a May cut and generally see the decision for the first cut to be in either June or August. We still think that the ONS' AWE series remains the most important factor in the decision to reach a quorum to cut on the MPC.

  • The single month figure for realised employment growth fell from 2.7% in December to 1.7% in March which meant the 3-month average fell 0.3ppt to 2.0%Y/Y in the 3-months to March from 2.3% in the 3-months to February. This is the lowest 3-month average since the 3-months to November 2021.
  • Expected employment growth has also come back down to 1.4%Y/Y in the 3-months to March. It is stillnot as soft as the 1.2%Y/Y seen in the 3-months to September/October 2023, but it further moves us off the rebound that we had seen up to 1.7% in the 3-months to January 2024.
  • Recruitment difficulties have also eased - looking at a simple diffusion index based on our calculations - we estimate that this is the easiest since the question was introduced in October 2021.
  • The 3-month average of expected wage growth had been either 5.1%Y/Y or 5.2%Y/Y for 8 consecutive periods (and was higher for the 10 periods before that). It has now fallen to 4.9%Y/Y in the 3-months to March 2024 which is the lowest since June 2022.
  • The single month reading for mean expected price growth was 3.7%Y/Y in March - the first time it has been below 4.0% since August 2021. This has brought the 3-month average to 4.1%Y/Y in the 3-months to March, down from 4.3%Y/Y in both February and January, and from a peak of 6.6%Y/Y in September 2022.
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Looking in more detail at the DMP, there is further softness in the survey when looking at the details. We still don't think this is enough to increase the risks of a May cut and generally see the decision for the first cut to be in either June or August. We still think that the ONS' AWE series remains the most important factor in the decision to reach a quorum to cut on the MPC.

  • The single month figure for realised employment growth fell from 2.7% in December to 1.7% in March which meant the 3-month average fell 0.3ppt to 2.0%Y/Y in the 3-months to March from 2.3% in the 3-months to February. This is the lowest 3-month average since the 3-months to November 2021.
  • Expected employment growth has also come back down to 1.4%Y/Y in the 3-months to March. It is stillnot as soft as the 1.2%Y/Y seen in the 3-months to September/October 2023, but it further moves us off the rebound that we had seen up to 1.7% in the 3-months to January 2024.
  • Recruitment difficulties have also eased - looking at a simple diffusion index based on our calculations - we estimate that this is the easiest since the question was introduced in October 2021.
  • The 3-month average of expected wage growth had been either 5.1%Y/Y or 5.2%Y/Y for 8 consecutive periods (and was higher for the 10 periods before that). It has now fallen to 4.9%Y/Y in the 3-months to March 2024 which is the lowest since June 2022.
  • The single month reading for mean expected price growth was 3.7%Y/Y in March - the first time it has been below 4.0% since August 2021. This has brought the 3-month average to 4.1%Y/Y in the 3-months to March, down from 4.3%Y/Y in both February and January, and from a peak of 6.6%Y/Y in September 2022.