MNI China Daily Summary: Wednesday, February 19

MNI BRIEF: China Jan Utilised FDI Lower Than Last Year

MNI BRIEF: China Unveils Plan To Attract Foreign Investors

MNI BRIEF: China To Ensure Credit Supply For Private Companies

MNI BRIEF: China Bond Connect Holdings Down In January

MNI: China Tier-one Housing Markets Likely To Stabilise

EZ/UK Bond Supply Calendar: IT Piu; SP, FR Due Thursday

MNI: US MBA: MARKET COMPOSITE -6.6% SA THRU FEB 14 WK

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

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

GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

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NEW ZEALAND: VIEW: Westpac Sees Jobs Growth Exceeding Population At End-2025

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Q4 data showed that the labour market continued to ease with the unemployment rate rising 0.3pp to 5.1%, its highest since 2016 excluding the pandemic, and employment down 1.1% y/y. Wages growth moderated further as a result. Westpac notes that the outcomes were “broadly in line” with the RBNZ’s projections and while “some of the details were marginally stronger than the RBNZ had assumed, none of this is likely to be persuasive; the RBNZ has already stated that the base case for its policy review later this month will be a 50bp OCR cut, unless there was conclusive evidence otherwise”.  

  • Westpac observes that “the fall in employment was partially offset by a slight drop in the participation rate to 71.0% (from a downwardly revised 71.1% in the September quarter). As we’ve noted previously, youth participation in particular has dropped off markedly in the last year or so, having risen sharply during the period of labour shortages in 2021-22”.
  • “Even with the economy expected to pick up over 2025, we think it will be towards the end of this year before we see jobs growth outstripping population growth.”
  • “The Labour Cost Index (LCI) rose by 0.6% for the private sector, in line with our forecast. The public sector was more subdued than in previous quarters with a 0.5% increase. (There was a 3.9% pay increase for schoolteachers in December, but as we noted, the timing of the LCI survey meant that it may not be recorded until next quarter.)”
  • “The unadjusted analytical LCI, which strips out pay increases that are related to higher productivity,” rose 4.2% y/y down from 4.9%, “its lowest since December 2021. Fewer roles have seen pay increases over the last year, and the average size of those increases has moderated.”
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Q4 data showed that the labour market continued to ease with the unemployment rate rising 0.3pp to 5.1%, its highest since 2016 excluding the pandemic, and employment down 1.1% y/y. Wages growth moderated further as a result. Westpac notes that the outcomes were “broadly in line” with the RBNZ’s projections and while “some of the details were marginally stronger than the RBNZ had assumed, none of this is likely to be persuasive; the RBNZ has already stated that the base case for its policy review later this month will be a 50bp OCR cut, unless there was conclusive evidence otherwise”.  

  • Westpac observes that “the fall in employment was partially offset by a slight drop in the participation rate to 71.0% (from a downwardly revised 71.1% in the September quarter). As we’ve noted previously, youth participation in particular has dropped off markedly in the last year or so, having risen sharply during the period of labour shortages in 2021-22”.
  • “Even with the economy expected to pick up over 2025, we think it will be towards the end of this year before we see jobs growth outstripping population growth.”
  • “The Labour Cost Index (LCI) rose by 0.6% for the private sector, in line with our forecast. The public sector was more subdued than in previous quarters with a 0.5% increase. (There was a 3.9% pay increase for schoolteachers in December, but as we noted, the timing of the LCI survey meant that it may not be recorded until next quarter.)”
  • “The unadjusted analytical LCI, which strips out pay increases that are related to higher productivity,” rose 4.2% y/y down from 4.9%, “its lowest since December 2021. Fewer roles have seen pay increases over the last year, and the average size of those increases has moderated.”