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May

Australian wage growth slows

Published: Wednesday 15 May 2019

  • Australian wage growth slows
  • German GDP growth down to 0.5% y/y
  • Crude oil inventories and Industrial Production could shift USD

Australia's wage price rise didn't accelerate in Q1 as the markets had expected. It matched the previous quarter at 0.5% when the markets had forecast 0.6%. It's only a smidgeon of a miss but it does add to the case for a rate cut in Australia. 
 
The other overnight news that missed the forecasts was Chinese in flavour. Both the fixed asset investment and industrial production number came up short of the expected levels although the Chinese unemployment level did fall to 5.0%, down from 5.2% previously. The battle of wills with the US over trade sanctions is the dominant factor here and the Yuan has been weakening all through the month but it gained a little strength on the employment news. 
 
This morning has already delivered weaker than expected economic growth data for Germany. An annual growth rate of just 0.6% is way below par and a real worry for the EU as it tries to act tough in the UK v EU Brexit standoff. For comparison, the UK annual GBP growth rate is 1.8% - probably enhanced by pre-Brexit stockpiling - but it hasn't been below 1.2% since 2009. We will get the Eurozone GDP numbers this morning and there is a chance the annual rate will miss the forecast of 1.2%. Be ready for that. 
 
There ain't not nuffink or anyfing in the UK data diary this morning but news of the Prime Minister bringing yet another iteration of her Brexit deal before parliament in June is the driving force. The fact that the opposition has made it clear it wants a 2nd referendum with any deal would suggest that won't fly. However, there is a pretty strong chance the Tory and Labour parties will both be battered and bruised in the EU elections in the interim. Maybe that will be the wakeup call they need to get their fingers out and actually deliver what was voted for. Sterling has slipped but found buyers whilst this latest fudge plays out. €1.15 and $1.29 are clearly interesting levels both technically and in terms of buying activity, so please use these are your support lines for short term planning at least. 
 
Canadian consumer inflation is expected to have picked up in April and we will see the actual numbers this afternoon. The Canadian Dollar has gained a little ground of late and this may accelerate that. 
 
And then, if we head south from Canada, we will get two interesting releases from the US of A this afternoon. Crude oil inventories have been dropping significantly in the US and that has an impact on, not only the price of oil but also the potential increased demand from US oil traders as they rebuild their stored product. The other data is industrial production.  We have to suspect that has suffered from the US v China trade standoff and the forecasts are all over the shop, so be ready for USD volatility this afternoon. And when I say 'be ready' I mean placing automated orders to take advantage of any volatility can be very rewarding. 
 
And the NBC website is showing a video of the rescue of a small child trapped in a locked car in Florida. That is excellent news but the oddity of the incident was that police were helped in the rescue by some prison inmates in their traditional striped pyjamas. I guess, if you are looking for someone to break into a car, where better to look than amongst the prison population. 

 

 

Jokes

The whole family was gathered at Bob and Martha's house for their son's birthday. Uncles and aunts, grandparents, nieces and nephews were all there to celebrate Danny's birthday. Martha said to her son,

"Danny. As it is your birthday, can you say grace?"

"I don't know what to say," said Danny.

"Well," said Martha, "Just think of someone who is deserving of help in life and ask God to help them. I think that would be a good use of a prayer, don't you?"

"Yes mum," said Danny. He put his hands together and closed his eyes and everyone followed suit. "Dear Lord, please provide some clothes for all those who have none. Like all those poor ladies on Daddy's computer."

 

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