MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI: US MBA: MARKET COMPOSITE +5.4% SA THRU DEC 06 WK

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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de Guindos: Re-iterates ECB’s Central Scenario For the GDP Deflator

ECB

Q: Elevated Profits margins may have given firms the ability to hoard labour. With falling profit margins now, could you comment on this situation, especially in light of the low unemployment rate.


A:

  • We have seen signs of the labour market slowing down a little bit, which can happen in parallel with a recovery in output. The consequence is a rise in productivity from low levels. This will help unit labour costs soften.
  • De Guindos re-iterates that the fall in profit margins should help buffer rises in unit labour costs (helping the GDP deflator moderate).
  • This can’t happen forever: In 2024, unit profits will continue to buffer unit labour costs, but this trend should reverse in 2025 as activity recovers.
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