UK DATA: Brightmine: Median Pay Awards At Lowest Level Since 2021
Brightmine median basic pay awards in the 3 months to January came in at 3.0%, the second consecutive reading where pay awards have remained at the lowest level since December 2021 (after the 3 months to December figure was revised to 3.0% from 3.3%).
- The press release notes this is "signaling a shift toward more restrained pay increases after a period of elevated awards."
- The dispersion in pay awards narrowed in January with the interquartile range having narrowed to between 2.5% and 4.0% in January, driven by the upper quartile falling.
- Looking ahead, pay awards are likely to remain at low levels due to the rising cost from employee National Insurance contributions rising.
- The rolling quarter of data is based on 69 pay settlements between November 2024 and January 2025, representing more than 95,000 employees (vs 22 pay award covering 227,000 employees between October and December).
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MNI: MNI JAPAN NOV CORE MACHINE ORDERS +3.4% M/M; OCT +2.1%
- MNI JAPAN NOV CORE MACHINE ORDERS +3.4% M/M; OCT +2.1%
LNG: US Energy Policy Uncertainty Driving Market Volatility
European natural gas rose 2.5% on Friday to EUR 47.40 to be up 5.3% last week, as cold weather, uncertainty around US energy and trade policies from the new administration drove prices higher. Withdrawals from storage in Europe have been faster this winter than last year’s and with the end of flows from Russia through the Ukraine, the region is becoming more reliant on global LNG supplies from both the US and Russia.
- There is growing pressure in Europe to reduce LNG imports from Russia, while the future of US sanctions is currently cloudy. The mild winter in Asia is helping it to access LNG from other exporters.
- US natural gas prices fell sharply on Friday driven by forecasts for warmer weather around month end. They fell 8% to $3.92 to be down 1.8% last week but still almost 8% higher on the month, which drove some profit taking. CFTC net longs rose 158.3% last week.
- Lower-48 US gas output increased 8.6% y/y as of Friday, while demand fell 23.1% y/y.
- President-elect Trump has said that he will remove the pause on licences for new LNG export facilities imposed by Biden and the ban on new drilling around much of the US coast, but this will require a vote in Congress. The start of his term is expected to drive volatility in energy markets.
- China’s December LNG import volumes fell 13.9% y/y.
FOREX: J.P. Morgan - FX Technicals
J.P. Morgan: "EUR/USD triggers another momentum divergence buy signal as it bounces from the post-payrolls retest of the 1.02 support layer. We see three resistance levels overhead. A push through the first at 1.033-1.035 would confirm a short-term trend reversal and target a move toward the 1.045-1.046 resistance zone. The higher zone and what we think will keep a ceiling over the pair through 1H25 even if the market squeezes surrounds 1.06.
The cable slide stalls, but there is little evidence that the pair is forming a lasting low despite the same oversold conditions that have been in place for weeks. The 1.1941 Sep channel marks the next potential support layer. That is followed by a large cluster of levels in the 1.18-handles. Key medium-term resistance remains at 1.2456-1.2486.
USD/JPY confirmed a short-term trend reversal with the break below pattern support near 156.00. We think a mean-reversion has scope to support levels surrounding 153.00.
AUD/USD tries to form a base pattern near the 0.617 Oct 2022 low, but continues to bearishly trade within the confines of the Sep 2024 trend channel for now. Key resistance rests in 0.63-handles. A break above that would derail the bearish trend bias. Next support sits at 0.6015-0.605."
