UK DATA: Xpert HR Median Pay Sees First Fall Since August 2023
- XpertHR median basic pay award in the 3 months to the end of January 2024 fell to +5.1% (vs +6% prior).
- This will be welcome news for the MPC after official ONS wage data remained more sticky than expected in last week's data release (which covers until the end of December 2023). There was a similar fall in mid-2023 from the XpertHR data, so there will be hope that this move downwards signals the start of a more meaningful trend.
- The fall in nominal wage growth had been hoped for given the decline in headline inflation and was reflected by "around half (+53.5%) of pay awards in a matched sample analysis worth less than the previous year's settlement" - which Xpert HR senior content manager flagged last month.
- Attwood, the manager notes "While the median has fallen, it is still elevated by historical standards, with pay awards having not been consistently at this level since 1991. And there are still some inflation-busting deals being made – one-fifth of reviews were worth at least 7%".
- There is still a fair amount of variability in pay awards with lower quartile at +4%, and upper quartile at +6.6%. It will be interesting to watch the upper quartile when the NLW is increased by 9.8% in April - and whether that pulls up the median awards, too.
- Data were collected between 1st November 2023 and 31st January 2024, based on 57 pay award covering 181,174 employees.
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KRW: 1 Month USD/KRW Continues To Slide On Equity Bounce, First 20-days Of Jan Trade Data Out
1 month USD/KRW traded with a negative bias for most of Friday's session, although the pair couldn't get sub 1330. We finished NY trade on Friday at 1331.74, a won gain of 0.36%. Note that onshore spot finished higher at 1338.90, so the early impetus is likely to be to the downside when onshore spot markets open in a short while.
- For 1 month USD/KRW we are still some distance from key EMA levels, the 20-day sitting back near 1318 on the downside. Highs from mid last week came in just above 1348.
- The won benefited from further US tech related gains on Friday. The SOX rallied a further 4.02%, the MSCI IT +2.31% higher. Positive spill over from TSMC's surge in Taiwan on Friday (following optimism around the 2024 chip/AI demand outlook) was a key driver of sentiment in the space.
- To recap, the Kospi finished 1.34% higher on Friday, while offshore investors added $559.2mn to local shares, curbing last week's outflows to -$430.2mn.
- On the data front shortly we have Jan first 20-days trade figures. Prior exports were +13%y/y, imports were -9.2%y/y. The first 10-days trade data suggested further positive momentum for export growth.
JGB TECHS: (H4) Fades Off Cycle High
- RES 3: 149.53 - High Mar 22 (cont) and a key resistance
- RES 2: 148.74 - High Jul 24 (cont)
- RES 1: 147.74 - High Jan 15
- PRICE: 146.69 @ 16:07 GMT Jan 19
- SUP 1: 144.60 - Low Dec 08
- SUP 2: 143.44 - Low Oct 31 (cont)
- SUP 3: 143.29 - 2.618 proj of the Mar 22 - Apr 18 - May 12 swing
JGBs slipped into the Friday close, erasing the large part of a recovery rally above initial resistance at 146.52, the Dec 7 high. While this opened resistance at 148.74 further out, last week’s correction lower shows that gains won’t be one-directional. 144.60 marks initial support, weakness through which would open the Oct 31 low of 143.44.
JGBS: Futures Stronger In Overnight Trade On Friday, BoJ Decision Tomorrow
In post-Tokyo trade, JGB futures are richer, closing +9 compared to settlement levels, after US tsys finished the week off lows despite comments from SF Fed President, Mary Daly. She pushed back against market expectations for interest rate cuts soon, saying she needs to see more evidence that inflation is sustainably headed toward 2% before adjusting rates.
- In the cash market, the curve flattened while outright yields pushed higher all week, the 2yr up 24bps to close at 4.384%, while the 10yr up 19bps to close at 4.122%.
- There is a quiet start to the week ahead. In the US session later today, the Leading Index (prior -0.5%, est -0.3%) is out.
- The local data calendar is empty today, with tomorrow's BoJ meeting the main focus this week. Expectations are fairly low in terms of meaningful shifts, with most focus on the April policy meeting in terms of a shift away from negative rates.
