Daily Insight
Group Economics Macro & Financial Markets Research
09 June 2016
US job turnover less dynamic Maritza Cabezas
US job turnover suggests that the labour market is cooling down…
Senior Economist
…supporting evidence of loss of momentum
Trade and FX reserves data point to stabilisation in China
Tel: +31 20 343 5618 maritza.cabezas@nl.abnamro.com
Arjen van Dijkhuizen Senior Economist Tel: +31 20 628 8052 arjen.van.dijkhuizen @nl.abnamro.com
US job openings suggest that labour market is cooling down May’s weak US employment report caused some waves in financial markets. Since then markets have scaled down their expectations of a rate hike. On Wednesday, the US Job Openings and Labor Turnover Survey (JOLTS) reported total job openings was little changed at 5.8 mn in April. The number of job openings, as a percent of total employment grew to 3.9% from 3.8% the previous month. In this same report, hiring showed that it continued to slow to 3.5% from 3.7%. Elsewhere, the quits rate, a measure of labour market confidence edged down to 2% from 2.1%, while the separations rate was unchanged. Although job openings tend to lag nonfarm payrolls, this report suggests that labour market dynamics have lost some momentum compared to the past when hiring and quitting were clearly showing signs of labour market tightening. Data on China’s FX reserves point to stabilisation … Recent data on China’s FX reserves point to stabilisation, contributing to a further easing of hard landing fears. In May, China’s FX reserves fell by USD 28 bn to USD 3192 bn. Although this drop was a touch larger than expected, FX reserves were more or less flat if exchange valuation effects are discounted for. That is encouraging, even more so if we take into account that the US dollar strengthened in May as markets did price in Fed rate hikes more strongly on the back of hawkish signals by Fed Board members. This shows that capital outflows from China have moderated even in more turbulent times. All in all, we still think it is unlikely that the sharp capital outflows seen in late 2015 and early 2016 will repeat and expect only a moderate depreciation of the Chinese yuan versus the US dollar in the course of this year.
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Daily Insight - US job turnover less dynamic- 09 June 2016
China’s exports and imports are bottoming out % yoy, 12 months moving average
50 40 30 20 10 0 -10 -20 -30 08
09
10 11 12 Export growth
13 14 15 Import growth
16
Source: Thomson Reuters Datastream
… as do the latest trade data Meanwhile, recent trade data also show a picture of stabilisation. Annual import growth remained negative in May, but at -0.4% yoy showed the smallest pace of contraction since late 2014. This is in line with our general assumption that China’s imports will bottom out this year, after the 15% contraction in 2015. Annual export growth in May was -4.1%. weaker than expected and than the April number (-1.8% yoy), illustrating that global demand is still lacklustre. Still, smoothing out the monthly volatility, China’s exports also seem to be bottoming out.
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Daily Insight - US job turnover less dynamic- 09 June 2016
Day
Date
Time
Country
Monday Monday Monday
06/06/2016 06/06/2016 06/06/2016
08:00:00 08:00:00 18:30:00
DE US US
Manufacturing orders - % mom Rosengran gives keynote at Helsinki Central Bank Conf Yellen in Philadelphia
Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday
07/06/2016 07/06/2016 07/06/2016 07/06/2016 07/06/2016 07/06/2016 07/06/2016
07:30:00 08:00:00 09:00:00 11:00:00 14:30:00 21:00:00
CN IN DE CH EC US US
Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday
08/06/2016 08/06/2016 08/06/2016 08/06/2016 08/06/2016 08/06/2016 08/06/2016
Thursday Thursday Thursday Thursday Thursday Thursday Thursday
09/06/2016 09/06/2016 09/06/2016 09/06/2016 09/06/2016 09/06/2016 09/06/2016
01:50:00 03:30:00 03:30:00 06:30:00 10:30:00
Friday Friday Friday Friday Friday Friday Friday
10/06/2016 10/06/2016 10/06/2016 10/06/2016 10/06/2016 10/06/2016 10/06/2016 10/06/2016
08:00:00
01:50:00
23:00:00
16:00:00
09:00:00
Key Economic Indicators and Events
Period
Latest outcome
Consensus
Apr
-2.0
-0.7
Foreign Reserves - USD bn Repo rate - % Industrial production - % mom Foreign currency reserves - CHF mln GDP - % qoq Output per hour nonfarm business sector - % qoq Fed Reserve consumer credit - USD bn
May Jun 7 Apr May 1Q F 1Q F Apr
3192 6.50 0.8 602.1bn 0.6 -0.6 13.4
3200 6.50 0.4
JP CN CN US NZ PL BR
GDP - % qoq Imports - % yoy Exports - % yoy US Job Openings by Industry Policy rate - % Reference rate - % Policy rate - %
1Q F May May Apr Jun 9 Jun 8 Jun 8
0.5 -0.4 -4.1 5757 2.3 1.5 14.25
0.5 -6.7 -4.1
JP CN CN NL GB KR BE
Machinery orders private sector - % mom CPI - % yoy PPI - % yoy CPI - % yoy Trade balance - GDP mln Policy rate - % Draghi Economic Forum BXL
Apr May May May Apr Jun 9
-11.0 2.3 -3.4 0.0 -3830 1.50
1.50
1.50
DE RU US CN CN CN GE GE
CPI - % yoy Key rate % Univ. of Michigan cons. confidence - index Money supply M 2 - % yoy Aggregate financing - CNY bn New loans - CNY bn Weidman in Eltville am Rhine Constancio in Eltville am Rhine
May F Jun 10 Jun P May May May
0.1 11.0 94.7 12.8 751 556
0.1 10.8 94.4 12.5 950 750
0.1
0.5 -0.6 17.7
ABN AMRO
6.50 0.2 0.5
2.1 14.25 -3.9 2.3 -3.1 0.0
94.0
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
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