INDONESIA: January FX Reserves Resilient Despite Currency Defense. 

November quarter job vacancies rose 4.2% q/q, the first quarterly increase since Q2 2022, leaving the annual rate down 10.3% y/y after -17.1% y/y. The labour market has remained strong despite weak growth with almost 400k new jobs in the year to November. The vacancy data is suggesting that there will little easing in the December data released on January 16. The RBA has noted that “vacancies are still relatively high”. 

• In December, the RBA said “that labour market conditions remain tight, while those conditions have been easing gradually, some indicators have recently stabilised”. The latest ABS vacancy data is consistent with this.
• The S&P Global December services PMI report noted that there was marginal “job shedding” in December. The shift was driven by less capacity pressures but also difficulties finding skilled labour to replace voluntary leavers. These shortages may have contributed to the pickup in vacancies.
• With the number of unemployed falling 3.0% q/q in Q4, the vacancy-to-employment ratio rose to 4pp to 56.9%, but still below Q2’s 57.9%. The ratio remains elevated and around 20pp above the historical average, signalling that labour market conditions remain robust, as also demonstrated by low unemployment & underemployment rates.
• Vacancies rose in 14 out of 18 industries with the strongest in "customer-facing" sectors. The private sector rose 4.7% q/q and public +0.4% q/q. 

Australia vacancies-to-unemployed %

China and Hong Kong equities are tracking lower as headlines come out around the consumer trade in program. The HSI and CSI were last off around 1%. The HSI has now traded at fresh YTD lows. 

• The program will expand in scope from 8 to 12 categories in terms of home appliance trade ins. The subsidy will be raised to 20% of the trade in price. So far this year, 81bn yuan has been allocated to the program.
• Details are also filtering out around support for equipment upgrades at smaller firms, while 100nb yuan in loans will be available for smaller tech firms.
• Consumer related indices are also tracking lower on the CSI 300. At this stage the details are probably not seen as enough to shift the broader macro needle for China.
• We await tomorrow's inflation data, while next PBoC easing steps are also awaiting. Timing of this remains uncertain, particularly given weaker yuan levels in the lead up to Trump's inauguration. USD/CNH was last near 7.3450. Onshore bond yields are also relatively steady, the 10yr still under 1.60% at this stage.   

AUDUSD fell to 0.6212 following November CPI data showing a 0.3pp drop in trimmed mean inflation to 3.2% y/y, thus increasing rate cut expectations. The pair is currently down slightly today to 0.6228 after a high of 0.6242 before the data release. The USD index is range trading and little changed.

• While November headline inflation picked up 0.2pp to 2.3% y/y, the focus is on trimmed mean given current state & federal electricity rebates and this underlying measure eased to 3.2% y/y, where it was in September. Q4 vacancies rose 4.2% q/q, the first quarterly rise since Q2 2022.
• Aussie is also weaker against other major currencies with AUDJPY down 0.1% to 98.37 after a low of 98.16. AUDNZD is 0.1% lower at 1.1052. AUDEUR is down 0.2% to 0.6015 after falling to 0.6004 and AUDGBP -0.1% to 0.4987 following 0.4979.
• Equities are mixed with the ASX up 0.5% & S&P e-mini +0.2% but Hang Seng down 0.4%. Oil prices continue to rally with WTI +0.6% to $74.71/bbl. Copper is down 0.1% and iron ore is around $97.50/t.
• Later the Fed’s Waller speaks on the economic outlook and the December FOMC minutes are published. US jobless claims, December ADP employment and November consumer credit as well as November German orders & retail sales and December euro area European Commission survey print.